No.  76 


THE  RAILROAD  COMMISSION  OP  WASHINGTON, 
ex  rel.  W.  H.  Paulhamus, 

vs. 


THE  PUGET  SOUND  ELECTRIC  RAILWAY. 


OPINION,  ORDER  AND 
FINDINGS  OF  FACT 


FEBRUARY  26,  1910 


Olympia,  Wash.: 

E.  L.  BOARDMAN,  PUBLIC  PRINTER 
1910 


J 


• , 


•5^  A— 

T^n-nT- 


BEFORE  THE  RAILROAD  COMMISSION  OF 
WASHINGTON. 


[No.  76.] 

The  Railroad  Commission  of  Washington,  ex  rel,  W.  H. 
Paulhamus,  Complainant , vs.  The  Puget  Sound 
Electric  Railway,  Defendant. 


SYLLABUS. 


A 


Common  Carriers — Amount  of  Return.  Provided  a public  service 
corporation  charges  no  more  than  each  particular  service  is  worth  to  its 
patrons,  it  is  entitled  to  receive  from  rates  and  fares  a fair  return  on 
the  value  of  its  property  used  in  the  public  service. 

Carriers — Return,  How  Estimated.  Generally  a reasonable  return 
for  a public  service  corporation  is  such  as  is  expected  and  generally 
realized  in  the  locality  upon  investments  for  a somewhat  similar  nature 
with  regard  to  the  risk  attending  them. 


o Carriers — Interurban  Road — Return,  Entitled  to.  Where  an  in- 

^ terurban  railroad  connects  two  large,  growing  cities  but  34  miles  dis- 
jCy  tant,  traversing  rich  and  fertile  valleys  with  numerous  towns,  the  future 
population  of  which  valleys  it  is  conceded  will  be  dense,  where  the  sur- 
roundings are  ideal  for  an  interurban  road  and  where  little  or  no  risk 
is  involved  in  the  enterprise,  a lower  rate  of  return  would  be  expected 
than  if  the  undertaking  was  hazardous  or  involved  risk.  Held,  under 
,vthe  facts  in  this  case  a 7 per  cent,  return  on  the  then  value  of  the 
property  is  sufficiently  remunerative. 

Discounts  — Expenses  of  Financing — Bonds — Well-Secured  Bonds. 
The  expense  necessary  to  be  paid  a reputable  broker  for  making  a full 
and  complete  investigation  into  the  cost  and  prospects  of  an  inviting 
'republic  service  enterprise  and  a reasonable  compensation  for  inducing 
his  clientage  to  invest  in  well-secured  bonds  and  securities  of  such  cor- 
poration is  a legitimate  and  proper  item  of  expense.  Well-secured  bonds 
are  such  as  have  behind  them  the  guarantee  of  a solvent  independent 
road  or  where  a substantial  amount  of  the  investment  is  procured  in- 
dependent of  the  mortgage  bonds.  Where  all  the  investment,  including 
costs  of  organization  and  preliminary  surveys,  are  derived  from  the 
sale  of  bonds,  the  loan  is  not  a financial  business  transaction,  but  is  a 
financial  speculation.  Discount  paid  under  such  circumstances  is  not 
a proper  item  to  be  considered  in  valuing  the  property.  Held,  under 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


the  facts  in  this  case,  that  5 per  cent,  of  75  per  cent,  of  the  cost  of 
reproducing  the  road  is  a proper  and  ample  sum  to  cover  the  costs  of 
financing  the  enterprise. 

Capital  to  Remain  Unimpaired — Depreciation — Obsolescence.  A 
public  service  corporation  is  clearly  entitled  from  its  operating  revenues 
to  not  only  earn  a reasonable  return  on  the  value  of  its  property  so 
used,  but  to  maintain  unimpaired  its  capital.  While  during  the  first 
few  years  of  the  life  of  the  railroad  there  is  practically  no  call  for 
renewals,  the  property  is  nevertheless  daily  growing  older,  and  the 
traffic  then  being  moved  should  bear  its  portion  of  the  burden  depend- 
ent upon  depreciation  and  obsolescence  and  not  throw  this  full  burden 
upon  the  traffic  moving  when  heavy  renewals  become  necessary.  In 
such  cases  there  should  be  charged  to  operation  a sum  sufficient  to 
care  for  such  renewals  and  obsolescence  as  they  become  necessary  and 
a fund  should  be  maintained  for  such  purpose.  Traffic  of  today  should 
pay  enough  to  secure  a fair  return  on  the  property  and  maintain  un- 
impaired the  capital,  but  cannot  be  called  upon  to  bear  burdens  that 
should  have  been  borne  by  traffic  in  the  past. 

Particular  Rate — When  Reasonable.  In  no  event  can  a carrier 
charge  more  than  the  particular  service  is  worth  to  the  shipper.  The 
value  of  the  service  is  to  be  considered  and  not  exceeded,  subject  to  the 
qualification  that  the  charge  must  at  least  equal  the  moving  cost. 
Where  mechanics,  laborers  and  clerks  have  been  induced  by  a long  con- 
tinuous rate  to  settle  in  suburban  towns  and  where  approximately  all 
of  the  heads  of  families  in  such  towns  are  such  laborers  and  clerks 
dependent  for  their  livlihood  on  employment  in  the  cities,  an  advance 
in  the  rates  to  such  an  amount  that  such  persons  cannot  live  and  pay 
the  rates,  but  must  abandon  their  homes  for  localities  where  cheaper 
transportation  prevails,  is  unreasonable,  irrespective  of  the  return  re- 
ceived by  the  company,  excepting  that  the  company  cannot  be  called 
upon  to  render  the  service  at  a loss. 

Schedule  of  Rates — When  Reasonable.  Many  features  must  be 
considered  in  determining  whether  a rate  is  or  is  not  reasonable.  The 
whole  schedule  must  be  considered  when  judging  its  fairness  to  the 
company,  and  if  from  all  its  revenues  it  receives  but  a fair  return  and 
the  patron  is  charged  no  more  in  each  particular  case  than  the  service 
is  worth,  per  se  the  rates  cannot  be  said  to  be  unreasonable. 

Comparison  of  Rates.  A comparison  of  the  rates  charged  generally 
for  a specific  service  by  other  roads  under  normal  conditions,  together 
with  a comparison  of  the  relation  of  such  rates  both  to  the  carrier  and 
the  shipper,  furnishes  a good  test  to  judge  of  the  reasonableness  of 
such  particular  rate.  Held,  that  as  the  rates  generally  charged  by 
electric  lines  to  points  not  suburban  are  at  least  two  cents  per  mile 
and  such  rates  are  generally  deemed  reasonable,  and  the  carrier  in  this 
case  not  receiving  under  the  rates  so  advanced  a sufficient  return,  no 
reason  exists  why  the  rate  to  points  not  suburban  and  between  inter- 
mediate stations  should  be  reduced  below  two  cents  per  mile.  As  resi- 


PUGET  SOUND  ELECTRIC  RY— OPINION 


5 


dents  of  Seattle  and  Tacoma  have  the  advantage  of  water  competition 
at  exceedingly  low  rates,  no  peculiar  circumstances  exist  calling  for  a 
reduction  of  the  through  rate. 

Discrimination — Suburban  Rates — Commutation  Rates.  The  fact 
that  an  occasional  traveler  from  points  not  suburban  might  be  com- 
pelled to  pay  a greater  rate  per  passenger  mile  than  the  constant  trav- 
eler from  suburban  points  does  not  subject  him  to  unjust  discrimina- 
tion. He  is  entitled  to  be  carried  at  a reasonable  rate,  but  not  neces- 
sarily as  cheaply  as  the  residents  of  the  more  favored  districts.  The 
public  is  interested  in  the  building  of  suburban  towns,  thus  aiding  the 
territorial  growth  of  cities,  relieving  their  congested  districts. 


STATEMENT  OF  THE  CASE. 

The  Puget  Sound  Electric  Railway  was  constructed  during 
the  years  1901  and  1902  and  commenced  operations  on  the 
24th  day  of  September,  1902.  The  road  traverses  the  valleys 
between  Seattle  and  Tacoma,  a distance  of  32.01  miles,  with  a 
branch  extending  from  Renton  Junction  to  Renton,  a distance 
of  2.96  miles ; a branch  from  Willow  Junction  to  Puyallup,  a 
distance  of  6.94  miles,  with  some  other  short  branches  to  which 
a reference  is  unnecessary.  At  the  time  of  commencing  opera- 
tions the  towns  in  the  valleys  traversed  by  the  road,  as  shown 
by  the  United  States  census  of  1900,  consisted  of  Georgetown, 
with  a population  of  243;  Kent  with  a population  of  755; 
Auburn,  with  a population  of  489 ; and  Puyallup,  with  a popu- 
lation of  1,884;  Renton,  with  a population  of  412,  while  Seattle 
had  a population  of  80,671,  and  Tacoma  a population  of 
37,714 ; and  at  the  present  time  Seattle  has  a population  ex- 
ceeding 275,000,  Tacoma  exceeding  100,000,  Puyallup  7,000, 
Kent  3,500,  Auburn  1,500,  Renton  3,500,  Georgetown  7,000, 
Meadows  500,  Quarry,  Duwamish  and  Allentown  from  500  to 
600,  Riverton  between  400  and  450,  Foster  900,  Tukwila  be- 
tween 500  and  600,  Earlington  500,  Algona  630,  Pacific  City 
800,  Milton  600,  and  numerous  smaller  villages  along  the  line 
of  road,  and  excluding  Renton  and  Puyallup,  which  are  situate 
upon  the  branch  lines,  the  territory  between  Seattle  and  Ta- 
coma contains  a population  tributary  to  this  road  of  approxi- 
mately 15,000. 


6 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


The  gross  earnings  of  the  road  since  it  began  operation  have 
been  as  follows  for  the  fiscal  years  ending  June  30th: 


1903  $354,990  67 

1904  430,732  84 

1905  450,632  32 

1906  574,962  06 

1907  708,548  78 

1908  721,542  85 


• — and  for  the  year  1909,  calculated  upon  the  same  basis  with 
reference  to  terminal  trackage  rights,  the  gross  earnings  were 
$755,552.17. 

The  earnings  of  the  company  are  derived  approximately  80 
per  cent,  from  passenger  revenue  and  20  per  cent,  from  freight 
revenue. 

On  October  17th,  1909,  the  defendant  company  put  in  force 
a schedule  of  passenger  rates  increasing  the  rates  between  Se- 
attle and  Tacoma  from  60  cents  to  73  cents  for  single  fare  and 
from  $1.00  to  $1.25  for  round  trip.  It  also  increased  its  rates 
from  Seattle  to  the  following  points  from  10  cents  to  the  amount 


named,  viz: 

To  Chicago  Avenue 11  cents 

To  Davis 12  cents 

Meadows  12  cents 

Southside  13  cents 

Floraville  14  cents 

Cardmoores  14  cents 

Duwamish  15  cents 

Quarry 16  cents 

Allentown  17  cents 

Riverton  17  cents 

Mortimer  18  cents 

Foster  19  cents 

Tukwila  20  cents 


— and  from  Seattle,  from  15  cents  to  the  rates  named  at  the 
following  points:  To  Black  River,  21  cents;  to  Renton  Junc- 
tion, 22  cents ; to  Renton,  27  cents ; from  Seattle,  from  20 
cents  to  23  cents  to  Nelson  and  25  cents  to  Orillia ; from  Se- 
attle to  O’Brien,  from  25  cents  to  30  cents ; from  Seattle  to 
Kent,  from  30  cents  to  31  cents ; from  Seattle  to  Thomas,  from. 
35  to  38  cents. 


PUGET  SOUND  ELECTRIC  RY  — OPINION 


7 


Under  the  tariff  in  force  from  practically  the  time  of  starting 
operation  until  October  17th,  1909,  provision  was  made  for  a 
round-trip  fare  as  follows:  From  Seattle  to  Chicago  Avenue, 
Davis,  Meadows,  Southside,  Floraville,  Cardmoores,  Duwamish, 
Quarry,  Riverton,  Mortimer,  Foster  and  Tukwila,  15  cents ; 
from  Seattle  to  Black  River,  Renton  Junction  and  Renton,  25 
cents ; from  Seattle  to  Nelson  and  Orillia,  35  cents ; to  O’Brien, 
45  cents ; to  Kent,  50  cents ; Thomas,  60  cents ; Meredith  and 
Christopher,  70  cents;  to  Auburn,  75  cents;  to  Farrow,  Stuck 
and  Bluffs,  85  cents ; to  Edgewood,  95  cents,  and  to  Milton, 
Fife,  Brookville  and  Waverly,  $1.00.  From  Tacoma  a round- 
trip  was  provided  in  the  old  tariff  to  Waverly,  Brookville  and 
Fife  of  15  cents ; to  Edgewood,  25  cents ; to  Bluffs,  35  cents ; 
to  Stuck,  Farrow  and  Auburn,  45  cents;  to  Christopher  and 
Meredith,  50  cents ; to  Thomas  and  Kent,  60  cents,  to  O’Brien, 
70  cents;  to  Orillia,  75  cents;  to  Nelson,  Renton  Junction  and 
Black  River,  85  cents;  to  Renton,  Tukwila,  Foster,  Mortimer, 
Riverton,  Quarry  and  Duwamish,  95  cents,  and  from  Card- 
moores north  to  Seattle  a round-trip  of  $1.00.  Under  the  new 
tariff  no  reduction  is  made  in  regular  fare  if  round-trip  ticket 
is  purchased  save  and  except  between  Seattle  and  Tacoma. 

Shortly  after  the  raise  in  rates  a formal  complaint  on  the 
relation  of  W.  H.  Paulhamus  was  filed  and  a citation  issued 
thereon  against  the  defendant  challenging  the  increased  rates 
and  alleging  the  increase  in  rates  to  be  unreasonable  and  ex- 
cessive. On  the  issuance  of  this  citation  the  Commission  also 
issued  a complaint  against  the  defendant,  under  section  12  of 
the  Commission  act,  for  the  purpose  of  ascertaining  and  fixing 
the  value  of  the  property  used  by  the  defendant  as  a common 
carrier. 

The  cases  were  consolidated  for  the  purpose  of  taking  evi- 
dence and  findings  of  fact  under  the  valuation  case  were  made 
and  such  findings  were  introduced  in  evidence  in  this  case. 
Findings  have  also  been  made  in  this  case  and  are  now  on  file. 
These  findings  are  too  voluminous  to  set  out  in  this  memoran- 
dum opinion,  but  the  important  ones  will  be  referred  to. 

The  Commission  found  the  market  value  of  the  property  used 


8 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


by  the  defendant  company  in  the  conduct  of  its  business  as  a 
common  carrier  to  be  $4,070,237 ; that  the  net  earnings  of  the 
road  from  operation,  figured  on  the  money  invested  since  its 
construction,  amounted  to  approximately  the  following  per 


cent. : 

For  the  fiscal  year  ending  June  30,  1903 5.15  per  cent. 

For  the  fiscal  year  ending  June  30,  1904 5.25  per  cent. 

For  the  fiscal  year  ending  June  30,  1905 5.18  per  cent. 

For  the  fiscal  year  ending  June  30,  1906 7.79  per  cent. 

For  the  fiscal  year  ending  June  30,  1907 9.92  per  cent. 

For  the  fiscal  year  ending  June  30,  1908 7.60  per  cent. 

For  the  fiscal  year  ending  June  30,  1909 5.74  per  cent. 


We  found  that  during  the  seven  years  the  property  has  been 
operated  there  has  been  a depreciation  of  the  physical  property 
to  an  amount  of  approximately  $500,000,  and  we  further  found 
that  no  replacement  fund  had  been  provided  or  charged  to  oper- 
ating expense  to  take  care  of  the  replacement  thus  rendered  nec- 
essary by  the  depreciation,  with  the  exception  of  approximately 
$51,000  expended  during  the  three  years  last  past  in  actual 
replacements,  which  have  been  charged  to  operating  expenses. 

The  annual  report  of  the  defendant  for  the  year  1909  shows: 


Gross  earnings  from  freight $131,779  85 

Gross  earnings  from  passengers 516,767  90 

Total  earnings $648,547  75 


The  commission  further  found  that  25  per  cent,  of  these  gross 
earnings,  or  $162,136-94,  should  be  expended  or  set  aside  from 
operating  expenses  to  cover  maintenance  and  replacement. 

There  was  spent  for  the  year  1909  for  maintenance  and  re- 
placement $102,125.21.  By  adding  the  difference  between  these 
two  items,  namely,  $60,011.73,  to  the  other  amount  expended 
for  operating  expenses,  the  operating  expenses  would  have  been 
increased  from  $393,995.88  to  $454,007.61.  Of  the  total  pas- 
senger receipts,  approximately  53  per  cent,  thereof  was  re- 
ceived from  the  sale  of  tickets  at  stations,  and  approximately 
47  per  cent,  was  received  by  conductors  for  cash  fare  paid  on 
trains.  Fifty-six  and  eight-tenths  per  cent,  of  the  total  pas- 
senger operating  revenue  was  received  from  through  passenger 
service  between  Seattle  and  Tacoma.  Other  passenger  receipts 


PUGET  SOUND  ELECTRIC  RY—  OPINION 


9 


cannot  be  divided  between  stations,  as  receipts  paid  to  con- 
ductors are  all  turned  in  as  local  fares  collected;  that,  as  in- 
dicated by  ticket  sales,  9.86  per  cent,  of  the  total  passenger 
operating  revenue  was  received  from  through  business  between 
Kent  and  Tacoma  and  Kent  and  Seattle,  9.22  per  cent,  from 
through  business  between  Auburn  and  Seattle  and  Auburn  and 
Tacoma,  and  6 per  cent,  from  through  business  between  Renton 
and  Seattle  and  Seattle  and  Renton.  The  ticket  sales  made  in 


the  Seattle  and  Tacoma  offices  show  ticket  sales  to  the  follow- 
ing points  for  the  fiscal  year  ending  July  1,  1909,  as  follows: 

For  For 

Seattle  Office.  Tacoma  Office. 

Georgetown  $699  55  $182  70 

Meadows 2,946  75  17  00 

rinwiimisli  2.204  45  

RiyprptnTi  

. . . 6,301  00 

Poster  

. . . 5,454  75 

Tukwila  

. . . 4,012  50 

4 95 

Renton  Junction  

. . . 2,029  30 

240  60 

Renton  

. . . 10,980  70 

371  75 

Orillia  

...  2,678  40 

176  60 

O’Brien  

...  2,356  50 

74  85 

Kent  

...  11,648  75 

893  00 

Thomas  

...  1,658  65 

103  60 

Christopher  

895  80 

34  30 

Auburn  

. . . 8,715  20 

1,097  20 

Algona  

. . . 1,511  00 

134  40 

Pacific  City  . . . . 

...  4,947  20 

421  20 

Edgewood 

628  10 

645  05 

Milton  

211  40 

2,387  35 

Seattle  to  Tacoma 

. . . 94,607  80 

Tacoma  to  Seattle 

47,820  40 

We  also  found  that  Southside,  Floraville,  Cardmoores,  Du- 
wamish,  Quarry,  Allentown,  Riverton,  Mortimer,  Foster  and 
Tukwila  were  strictly  suburban  towns  tributary  to  Seattle ; that 
approximately  90  per  cent,  of  the  heads  of  all  families  in 
these  towns  earn  their  livlihood  as  laborers,  mechanics,  and 
clerks  in  Seattle,  the  clerks  traveling  to  and  from  Seattle  six 
days  in  the  week  and  the  laborers  making  the  trip  from  four  to 
five  times  weekly.  That  Tidehaven,  Brookville,  Meeker,  Berry- 
town,  Cedarhurst,  Firwood,  Ardena,  Fife,  Milton,  Edgewood, 
Jovita,  Bluffs,  Pacific  City  and  Algona  were  strictly  suburban 


10 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


towns  tributary  to  Tacoma,  from  fifty  to  sixty  per  cent,  of 
the  heads  of  all  families  living  in  these  towns  earning  their  livli- 
hood  as  laborers,  clerks  and  artisans  in  Tacoma.  That  a large 
portion  of  the  residents  of  Pacific  City  earn  their  livelihood  as 
clerks  and  laborers  in  Seattle.  That  a majority  of  the  persons 
described  as  heads  of  families  in  such  suburban  towns  own  their 
own  homes  or  are  paying  for  the  same  on  the  installment  plan, 
and  were  induced  to  procure  the  same  at  such  points  by  reason 
of  the  said  rate  and  its  being  so  long  continued. 

We  further  found  that  since  the  raise  in  rates  that  at  least 
20  families  had  moved  from  Quarry,  Duwamish  and  Allentown, 
12  from  Tukwila,  18  from  Foster  and  a large  number  from  Pa- 
cific City  and  more  or  less  from  all  the  towns  mentioned  as 
suburban  towns,  and  many  others  were  contemplating  moving  if 
a reduction  in  rates  was  not  secured,  all  by  reason  of  the  in- 
ability of  the  residents  to  pay  the  increased  fare  and  follow 
their  vocation  in  Seattle  and  Tacoma  as  aforesaid. 

Puyallup  was  served  by  the  Tacoma  Railway  & Power 
Company,  an  allied  corporation,  by  a line  running  from  Fern 
Hill  over  an  adverse  grade,  traveling  a distance  of  approxi- 
mately 16  miles  to  Tacoma.  The  defendant  company’s  line  via 
Willow  Junction  is  about  9.91  miles  to  Tacoma  and  is  over  a 
much  easier  grade  and  through  a more  fertile  and  populous 
district.  That  when  the  defendant  company  was  asking  a 
franchise  from  the  City  of  Puyallup,  the  city,  through  members 
of  its  council,  suggested  inserting  a provision  that  the  rates  to 
be  thereafter  charged  between  Puyallup  and  Tacoma  should 
not  exceed  the  rates  then  and  theretofore  charged  over  the 
lines  of  the  Tacoma  Railway  & Power  Company,  namely,  15 
cents  single  trip  and  25  cents  round  trip.  That  at  such  time 
the  manager  of  the  defendant  company  objected  to  the  insertion 
of  the  provision,  giving  as  a reason  that  it  would  be  an  obstacle 
to  the  floating  of  the  securities,  and  indirectly  promised  that 
should  such  franchise  be  granted  the  rates  would  not  in  the 
future  exceed  the  rates  charged  by  the  Tacoma  Railway  & 
Power  Company  as  before  stated.  That  many  people  live  in 


PUGET  SOUND  ELECTRIC  RY.— OPINION 


11 


Puyallup  and  earn  their  livlihood  in  Tacoma  as  clerks  and 
laborers. 

That  the  town  of  Renton  is  served  by  the  Seattle,  Renton 
& Southern  Railway,  an  electric  line  extending  from  Seattle  to 
Renton.  That  the  rates  now  and  heretofore  enforced  by  said 
last  named  company  is  the  rate  charged  by  the  defendant  prior 
to  the  17th  day  of  October,  1909,  namely,  15  cents  for  a single 
trip  and  25  cents  for  the  round  trip.  That  for  the  year  ending 
June  30th,  1909,  the  average  earnings  from  passengers  going 
to  and  from  Renton  as  indicated  by  the  sales  of  tickets  at  the 
different  ticket  offices  amounted  to  the  sum  of  $17,254.10,  or 
an  average  of  $1,438.00  per  month;  that  between  June  30th, 
and  the  16th  day  of  October,  said  sales  had  increased  to  an 
average  of  $2,708.00  per  month,  and  between  the  17th  day  of 
October  and  the  1st  day  of  January,  1910,  while  said  increased 
rates  were  in  force,  said  passenger  earnings  decreased  to 
$302.00  per  month.  That  while  more  passengers  proportion- 
ately paid  fares  to  conductors  after  the  return  fare  was  dis- 
continued and  the  ticket  sales  therefore  would  not  accurately 
show  the  number  of  passengers  carried,  still  during  said  last 
mentioned  time  the  earnings  of  the  Seattle,  Renton  & South- 
ern from  passenger  business  between  Renton  and  Seattle  in- 
creased more  than  150  per  cent. 

Ticket  sales  at  the  Seattle  office  for  travel  between  Seattle 
and  Foster  averaged  between  June  30th  and  October  16th,  1909, 
$543.34  per  month,  while  between  October  17th  and  the  1st  of 
January  such  sales  decreased  to  an  average  of  $66.73  per 
month;  that  the  same  office  showed  sales  between  Seattle  and 
Riverton  between  June  30th  and  October  16th  averaging  $629. 
45  per  month,  while  between  October  17th  and  January  1st  such 
sales  decreased  to  an  average  of  $80.35  per  month;  that  the 
sales  indicated  from  the  same  office  for  travel  between  Du- 
wamish  and  Seattle  averaged  between  June  30th  and  October 
16th,  $191.25  per  month,  while  between  October  17th  and 
January  1st  such  sales  decreased  to  an  average  of  $38.12  per 
month ; that  as  indicated  by  the  sales  at  the  same  office  the 
travel  between  Seattle  and  Pacific  City  averaged  between  June 


12 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


30th  and  October  16th,  $355.34  per  month,  while  between 
October  17th  and  January  1st  such  sales  decreased  to  $130.30 
per  month.  That  during  the  same  period  the  sales  of  the  Ta- 
coma office  for  travel  between  Tacoma  and  Pacific  City  averaged 
for  the  former  period  $61.40  per  month,  for  the  latter  period 
$38.95  per  month.  That  the  sales  of  tickets  at  the  Seattle 
office  for  travel  between  Seattle  and  Tukwila  averaged  for  the 
former  period  $345.91,  while  for  the  latter  period  such  sales 
averaged  $38.96  per  month.  That  the  sales  of  tickets  to  and 
from  Kent  as  shown  by  sales  at  the  ticket  offices  decreased 
from  an  average  of  $3,664.35  per  month,  for  the  former  period, 
to  an  average  of  $1,460.00  for  the  latter  period. 

The  greater  increase  in  suburban  rates  was  to  points  outside 
and  tributary  to  Seattle,  many  of  such  rates  being  more  than 
doubled,  the  rates  to  points  suburban  to  and  tributary  to  Ta- 
coma being  increased  a much  less  per  cent.  An  analysis  of  the 
earnings  from  Tacoma  to  such  last  named  point  shows  no  such 
falling  off  in  revenue  as  is  shown  to  points  outside  of  Seattle. 
For  instance,  between  Edgwood  and  Tacoma  under  the  old  rate 
of  15  and  25  cents  their  ticket  sales  at  Tacoma  were  $70.00  per 
month,  while  under  the  new  rates  of  18  and  36  cents  the  average 
monthly  sales  were  $33.00 ; at  Jovita  the  average  monthly 
sales  at  Tacoma  were  $30.00  and  under  the  new  rates  of  19  and 
38  cents  the  average  monthly  sales  were  $21.00;  that  Auburn, 
under  the  old  rates  of  25  and  40  cents,  respectively,  the  aver- 
age monthly  ticket  sales  were  $553.80  and  under  the  new  rates 
of  29  and  58  cents  the  average  sales  were  $316.00  per  month; 
at  Kent,  under  the  old  rates  of  35  and  60  cents,  the  average 
monthly  sales  at  Kent  and  Tacoma  were  $449.10  and  under  the 
new  rates  of  39  and  78  cents  the  average  sales  were  $237.25. 

That  during  the  months  of  June,  July,  August,  September 
and  part  of  October,  1909,  the  A.-Y.-P.  fair  was  in  progress 
in  Seattle  and  would  influence  the  receipts,  but  the  increase  in 
passenger  revenue  for  said  months  over  corresponding  months 
for  1908  was  no  greater  than  the  increase  of  other  months  for 
1909  over  corresponding  months  for  1908,  until  the  raise  in 
rates. 


PUGET  SOUND  ELECTRIC  RY— OPINION 


13 


Other  material  facts  will  be  referred  to  in  the  opinion.  The 
Commission  is  asked  to  reduce  the  rates  to  those  charged  under 
the  schedule  in  force  prior  to  October  17th,  1909.  The  first 
inquiry  presented  is  what  sum  of  money  is  the  company  entitled 
to  earn  and  receive  net  from  rates  and  fares.  This  question 
has  been  so  repeatedly  passed  upon  by  the  courts  as  to  be  well 
settled. 

Providing  the  company  charges  no  more  than  the  particular 
service  rendered  is  worth  to  the  patrons,  it  is  entitled  to  re- 
ceive a fair  return  on  the  value  of  its  property  used  in  the 
public  service.  There  is  no  fixed  rate  of  compensation  which 
must  be  allowed.  What  would  be  a reasonable  return  in  one 
place  might  be  unreasonable  in  another,  and  what  would  be  a 
reasonable  return  on  one  class  of  property  might  not  be  on 
another  class  situate  in  the  same  place.  The  amount  of  risk 
in  the  business  is  one  of  the  most  important  factors.  If  the 
investment  is  of  a hazardous  nature,  a higher  return  would  be 
justified  than  where  no  risk  was  involved.  Generally  a reason- 
able return  for  a public  service  corporation  is  such  a return 
as  is  expected  and  usually  realized  in  the  locality  upon  invest- 
ments for  a somewhat  similar  nature,  with  regard  to  the  risk 
attending  them. 

Wilcox  v.  Consolidated  Gas  Company , 212  U.  S.  19. 

At  the  time  of  the  construction  of  this  road,  Seattle  and  Ta- 
coma were  substantial  cities  and  their  future  was  assured.  The 
valleys  traversed  had  already  demonstrated  their  fertility  and 
adaptability  to  the  raising  of  fruits  and  garden  produce,  and 
that  such  valleys  would  be  densely  populated,  in  the  very  near 
future,  was  recognized  and  admitted  by  all.  The  field  was  ideal 
for  an  interurban  line;  the  risk  attending  the  enterprise  was 
even  then  a minimum,  and  now  the  future  of  the  property  is  be- 
yond question.  It  has  grown  constantly  and  will  continue  to 
grow  in  value,  thus  entitling  the  original  investors  to  increasing 
returns  on  the  money  originally  expended.  On  such  a property  a 
low  rate  of  return  would  usually  be  expected.  The  evidence  is 
conflicting  as  to  what  would  be  expected  as  a return  in  a similar 
enterprise.  Jacob  Furth  places  the  rate  of  interest  on  Puget 


14 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Sound  in  1901,  on  good  security,  at  7 per  cent.  Mr.  Laffin 
and  Mr.  Hill  state  that,  ordinarily,  a ten  per  cent,  return 
would  be  expected  from  an  investment  of  this  nature.  We  have, 
however,  in  the  record,  evidence  which  shows  what  the  people 
loaning  the  money,  as  well  as  the  managers  of  this  property, 
were  satisfied  to  receive.  The  Tacoma  Railway  & Power  Com- 
pany was  so  run  down  it  could  not  borrow  money.  The  credit  of 
the  defendant  was  good.  We  find  it  issuing  its  bonds  and  rais- 
ing $2,250,000  for  the  purpose  of,  and  actually  loaning  this 
money  to,  the  Tacoma  Railway  & Power  Company  on  its 
promissory  notes  at  six  per  cent.  If  managers,  and  lenders 
were  satisfied  with  a six  per  cent,  return  from  the  moneys  loaned 
on  the  uncertain  security  of  the  Tacoma  Railway  & Power 
Company,  it  seems  strange  that  they  would  not  be  satisfied  with 
a similar  return  from  the  people  on  an  absolutely  sure  invest- 
ment. While  we  feel  that  a net  return  of  7 per  cent,  is  liberal, 
we  also  feel  that  under  the  decision  of  the  Supreme  Court  of 
the  United  States  in  Wilcox  v.  Consolidated  Gas  Company , 
supra , we  would  not  be  justified  in  allowing  a less  sum. 

The  value  of  defendant’s  property  used  in  this  service  has 
been  found  by  the  Commission,  including  working  capital  and 
supplies  on  hand,  to  be  the  sum  of  $4,070,237.  This  valuation 
was  arrived  at  by  ascertaining,  after  a most  thorough  exam- 
ination by  expert  accountants,  the  amount  expended  by  the 
company  in  constructing  its  lines,  which  was  found,  exclusive 
of  working  capital  and  supplies,  to  be  $2,933,863.69 ; that  it 
would  cost  to  reproduce  the  property  new  at  the  present  time 
$4,157,558  (this  included  an  increase  in  the  value  of  the  right- 
of-way  and  terminals  over  what  it  cost  of  approximately 
$770,000)  ; ascertaining  the  depreciated  condition  of  the  prop- 
erty; ascertaining  the  reflected  value  of  the  property  as  shown 
by  the  amount  and  value  of  its  stock  and  bonds  (the  method 
followed  is  set  out  in  the  findings),  found  to  be  $3,987,376.23; 
ascertaining  the  density  of  the  population  and  traffic  and  all 
other  conditions  which  in  the  judgment  of  the  Commission 
would  affect  the  market  value  of  the  property. 


PUGET  SOUND  ELECTRIC  RY— OPINION 


15 


The  defendant  insists  that  in  estimating  the  cost  of  repro- 
duction of  its  road  (and  which  should  be  included  in  estimat- 
ing its  value),  the  sum  of  $120,500  should  be  allowed  to  cover 
the  item  of  discount.  The  Commission  has  declined  to  allow 
this  sum,  or  any  sum  greater  than  $150,273.00,  which  is  5 per 
cent  of  75  per  cent,  of  the  cost  of  reproduction.  The  amount 
of  discount  of  necessity  depends  upon  the  amount  of  capital 
procured  from  outside  sources  which  goes  into  the  enterprise. 
It  also  depends  largely  upon  the  margin  between  the  value  of 
the  contemplated  enterprise  and  the  amount  raised  from  outside 
sources.  In  the  present  case  all  moneys,  including  organization 
cost  and  preliminary  surveys,  were  covered  by  the  issue  and  sale 
of  bonds.  In  the  judgment  of  the  Commission,  such  is  not  a 
financial  business  loan ; it  is  financial  speculation.  If  any  loss 
occurs  it  must  fall  on  the  mortgagee.  It  follows  that,  taking 
all  the  risk  in  case  the  investment  is  not  profitable,  the  man  so 
venturing  his  capital  will  insist  on  having  a handsome  margin. 

The  question  must  be  determined  by  considering  the  loan  as 
a financial  business  undertaking  and  not  wholly  as  a specula- 
tion. 

The  evidence  introduced  before  the  Commission  is  to  the 
effect  that  investors  are  plentiful  in  well-secured  railroad  bonds 
at  5 per  cent.  That  safe  or  well-secured  bonds  are  such  as  have 
behind  them  the  guarantee  of  an  independent  solvent  or  strong 
road,  or  where  the  amount  required  would  not  exceed  75  per 
cent,  of  the  amount  invested,  providing  investigation  shows  the 
enterprise  to  be  an  inviting  one.  That  in  such  case  the  ex- 
pense necessary  to  be  paid  to  a reputable  broker  for  making  a 
full  and  exhaustive  investigation  into  the  enterprise  and  the 
compensation  to  be  paid  him  for  interesting  his  clientage  into 
investing  must  be  paid,  and  this  sum  is  a legitimate  and  proper 
item  of  expense.  The  evidence  further  discloses  that  if  75  per 
cent,  of  the  cost  of  this  road  was  to  be  so  secured,  5 per  cent  of 
such  amount  would  be  ample  to  compensate  a broker  for  his 
expense  and  commission.  This  is  in  keeping  with  the  trend  of 
receut  and  present  legislation.  Many  states  now  prohibit  the 


16 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


issue  of  stock  excepting  it  be  represented  by  cash  paid  in  at  par 
value.  Will  justice  result  in  this  case  from  such  holding? 

The  money  to  build  the  road  was  realized ; $500,000  preferred 
stock  realized  $384,500 ; $3,080,393  bonds  realized  $2,839,363, 
which  represents  the  cost  in  cash  of  the  road  and  equipment  and 
$300,000  to  cover  working  capital  and  supplies  on  hand ; 
$405,000  par  value  common  stock  was  delivered  to  bondholders 
as  an  inducement  in  selling  the  bonds.  All  common  stock,  ex- 
cepting $1,500,000,  was  traded  for  other  property  not  included 
in  or  used  as  operating  property,  and  returns  on  such  stock 
should  be  derived  from  the  property  received  in  exchange;  $1,- 
095,000  par  value  of  the  common  stock  went  to  the  four  bank- 
ing houses  who  negotiated  the  sale  of  the  securities. 

By  allowing  a net  return  of  7 per  cent,  on  $4,070,237,  the 
value,  the  company  receives  $284,916.59,  to  be  disbursed  as 
follows:  $30,000,  6 per  cent,,  on  preferred  stock;  $154,019.65, 
5 per  cent.,  on  $3,080,393  worth  of  bonds;  $28,350,  7 per 
cent.,  on  $405,000  common  stock,  leaving  a net  balance  of 
$72,546.94  per  annum  to  the  syndicate  of  bankers  for  nego- 
tiating the  sale  of  the  securities.  Truly  a handsome  compensa- 
tion for  the  brain  eneregy  expended. 

The  net  earnings  of  the  company  for  the  year  1909  were 
$273,653.78.  If  there  be  deducted  from  this  sum  $60,011.73, 
the  additional  amount  necessary  to  set  aside  to  cover  deprecia- 
tion, it  would  show  a net  return  of  $213,642.05.  A 7 per  cent, 
return  on  $4,070,237  amounts  to  $284,916.59.  This  shows  a 
deficit  of  $91,274.54  per  year  under  the  old  rates.  This  addi- 
tional amount  the  company  is  entitled  to  make  from  its  rates 
and  fares,  provided,  as  before  stated,  the  amount  charged  its 
patrons  is  no  more  than  the  particular  service  rendered  is  worth. 
This  operating  expense  includes  a sufficient  sum  to  be  either 
expended  in  replacements  or  set  apart  to  cover  depreciation  and 
replacement.  A public  service  corporation  is  clearly  entitled 
from  its  operating  revenues  to  not  only  earn  a reasonable  re- 
turn, but  to  maintain  unimpaired  its  capital.  On  the  defend- 
ant’s road  there  are,  approximately,  7 miles  or  13  per  cent,  of 
its  track  constructed  on  pile  trestles.  The  average  life  of  this 


PUGET  SOUND  ELECTRIC  RY— OPINION 


17 


structure  is  not  to  exceed  ten  years.  Ties  must  be  renewed  on 
an  average  of  every  seven  years.  Equipment  not  only  wears 
out  but  becomes  inadequate  and  obsolete,  and  so  with  prac-. 
tically  all  its  physical  properties  excepting  real  estate.  In 
ascertaining  the  cost  of  reproducing  this  property  the  Commis- 
sion deducted  from  its  estimated  cost,  new,  approximately  $500,- 
000  by  reason  of  its  depreciation.  The  first  few  years  of  life  of 
such  a property  calls  for  no  renewals,  but  the  property  is 
daily  growing  older  and  the  traffic  then  moved  should  bear 
its  portion  of  the  burden  dependent  upon  depreciation,  and  not 
throw  this  full  burden  on  the  traffic  moving  when  heavy  re- 
newals become  necessary.  The  defendant  company,  however, 
insists  that  not  having  provided  a depreciation  fund  in  the  past, 
it  is  entitled  out  of  the  traffic  now  moving  to  charge  rates  that 
will  not  only  care  for  the  average  depreciation  but  in  addition 
make  up  the  deficiency  in  this  depreciation  account  accruing 
in  the  past.  The  only  authority  called  to  our  attention,  or 
which  we  have  been  able  to  find,  which,  it  is  claimed,  tends  to 
support  the  defendant’s  contention  is  Metropolitan  Trust  Co. 
vs.  Houston  $ T.  C.  R.  R.  Co.,  90  Fed.  683.  This  decision  was 
rendered  on  an  application  for  an  injunction,  supported  by 
affidavits  and  resisted  by  counter  affidavits. 

The  court  in  discussing  the  case,  as  presented  by  the  affi- 
davits, shows  that  the  road  had  cost  in  construction  and  in 
betterments  and  improvements  $62,000  a mile ; that  its  stock  and 
bonded  indebtedness  equaled  $53,000  a mile;  that  the  Texas 
Commission,  in  valuing  the  property,  had  not  considered  or  al- 
lowed anything  for  the  favorable  location  of  the  road  or  the  in- 
crement to  its  value  by  reason  of  the  settlement  of  the  country 
and  its  advance  in  prosperity,  nor  anything  for  the  settling 
and  seasoning  of  the  road,  nor  its  established  business,  nor 
any  account  of  betterments  made  necessary  by  the  growth  of 
trade.  After  making  the  above  suggestions,  the  Court  further 
states:  “The  Commission  states  that  in  estimating  the  value 
of  these  roads  they  included  interest  on  the  money  invested 
during  the  period  of  construction.  This  is  somewhat  vague,  but 
—2 


18 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


the  ‘period  of  construction’  mentioned  is  probably  limited  to  the 
time  when  each  section  of  the  road  was  opened  to  the  public  for 
business.  And  even  if  extended  to  the  time  when  the  road  was 
completed  to  Denison  and  to  Austin  in  1878,  nearly  20  years 
after  its  construction  was  begun  at  Houston,  it  would  not 
cover  all  of  the  time,  and  possibly  not  nearly  all  of  the  time,  in 
which  the  railroad  company  and  its  predecessors  have  lost 
interest  on  the  investment.” 

This  language,  it  is  contended,  justified  the  conclusion  that 
in  ascertaining  the  value,  losses  incurred  in  the  past,  or  inability 
to  make  a return,  are  elements  that  of  themselves  should  be 
considered  and  added  to  the  investment  and  to  the  cost  of  re- 
production. 

If  this  position  is  sound,  it  must  follow  that  the  more  worth- 
less a road  is  in  point  of  earning  ability,  the  more  valuable  it 
becomes  as  time  passes.  The  Circuit  Court  was  dealing  with 
the  elements  that  should  be  considered  in  ascertaining  the 
value  upon  which  a return  should  be  allowed  rather  than  the 
amount  of  the  return  itself.  The  elements  considered  by  the 
Commission,  as  demonstrated  by  the  findings,  including  the 
advantageous  location,  the  enhanced  value  of  its  right-of-way 
and  lands  and  the  increased  volume  of  business  owing  to  the 
development  of  the  country,  cover  every  element  criticised  by 
the  Court  as  not  having  been  considered  by  the  Texas  Com- 
mission, and  the  conclusion  reached  by  us  is  in  accord  with  the 
decision. 

Traffic  of  today  should  pay  enough  to  secure  a fair  return 
on  the  property  and  maintain  unimpaired  the  capital  invested, 
but  cannot  be  called  upon  to  bear  burdens  that  should  have 
been  borne  by  traffic  in  the  past. 

The  qualification  that  the  company  cannot  charge  more  than 
the  particular  service  is  worth  to  the  shipper  (patron)  is 
clearly  settled: 

Covington  etc.  Turnpike  Co.  vs.  Sanford , 164  U.  S.  578 ; 
San  Diego  Land  Co.  vs.  National  City , 174  U.  S.  939; 

Interstate  Commerce  Commission  vs.  B.  R.  Co .,  118  Fed. 
613; 


PUGET  SOUND  ELECTRIC  RY.—  OPINION 


19 


Kennebeck  Water  Co.  vs.  Waterville,  97  Me.  187 ; 
Water  District  vs.  Water  Co .,  99  Me.  371 ; 

Smith  vs.  Ames,  169  U.  S.  466 ; 

Thurber  vs.  New  York  Central  # H.  R.  R.  Co.,  2 I.  C. 
C.  742; 

Delaware  State  Grange  vs.  N.  Y .,  P.  $ N.  R.  Co.,  3 I. 
C.  C.  554; 

Beale  & Wyman,  Railroad  Rate  Reg.,  Sec.  320-321. 

In  Covington  and  Turnpike  Company  vs.  Sanford,  supra. 
Justice  Harlan  says:  “When  the  question  arises  whether  the 
legislature  has  exceeded  its  constitutional  power  in  prescribing 
the  rates  to  be  charged  by  a corporation  controlling  a public 
highway,  stockholders  are  not  the  only  persons  whose  rights  or 
interests  are  to  be  considered.  The  rights  of  the  public  are  not 
to  be  ignored.  It  is  alleged  here  that  the  rates  prescribed  are 
unreasonable  and  unjust  to  the  company  and  its  stockholders. 
But  that  involves  an  inquiry  as  to  what  is  reasonable  and  just 
for  the  public.  If  the  establishing  of  new  lines  of  transpor- 
tation should  cause  a diminution  in  the  number  of  those  who 
need  to  use  a turnpike  road,  and  consequently  a diminution  in 
the  tolls  collected,  that  is  not  itself  a sufficient  reason  why  the 
corporation  operating  the  road  should  be  allowed  to  maintain 
rates  that  would  be  unjust  to  those  who  must  or  do  use  its  prop- 
erty. The  public  cannot  properly  be  subjected  to  unreasonable 
rates  in  order  simply  that  stockholders  may  earn  dividends.  The 
legislature  has  the  authority  in  every  case,  where  its  power  has 
not  been  restrained  by  contract,  to  proceed  upon  the  ground 
that  the  public  may  not  rightfully  be  required  to  submit  to 
unreasonable  exactions  for  the  use  of  a public  highway  estab- 
lished and  maintained  under  legislative  authority.  If  a cor- 
poration cannot  maintain  such  a highway  and  earn  dividends 
for  stockholders,  it  is  a misfortune  for  it  and  them  which  the 
Constitution  does  not  require  to  be  remedied  by  imposing  unjust 
burdens  upon  the  public.  So  that  the  right  of  the  public  to  use 
the  defendant’s  turnpike  upon  the  payment  of  such  tolls  as  in 
view  of  the  nature  and  value  of  the  service  rendered  by  the 
company  are  reasonable,  is  an  element  in  the  general  inquiry 


20 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


whether  the  rates  established  by  law  are  unjust  and  unreason- 
able. * * * In  short,  each  case  must  depend  upon  its  special 
facts ; and  when  a court,  without  assuming  itself  to  prescribe 
rates,  is  required  to  determine  whether  the  rates  prescribed  by 
the  legislature  for  a corporation  controlling  a public  highway 
are,  as  an  entirety,  so  unjust  as  to  destroy  the  value  of  its 
property  for  all  the  purposes  for  which  it  was  acquired,  its 
duty  is  to  take  into  consideration  the  interests  both  of  the  pub- 
lic and  of  the  owner  of  the  property,  together  with  all  other 
circumstances  that  are  fairly  to  be  considered  in  determining 
whether  the  legislature  has,  under  the  guise  of  regulating  rates, 
exceeded  its  constitutional  authority,  and  practically  deprived 
the  owner  of  property  without  due  process  of  law.” 

In  Smith  vs.  Ames , supra,  the  same  learned  judge  used  the 
following  language : “It  cannot,  therefore,  be  admitted  that  a 
railroad  corporation  maintaining  a highway  under  the  authority 
of  the  state  may  fix  its  rates  with  a view  solely  to  its  own  in- 
terests and  ignore  the  rights  of  the  public.  But  the  rights  of 
the  public  would  be  ignored  if  rates  for  the  transportation  of 
persons  or  property  on  a railroad  are  exacted  without  reference 
to  the  fair  value  of  the  property  used  for  the  public  or  the  fair 
value  of  the  service  rendered,  but  in  order  simply  that  the  cor- 
poration may  meet  operating  expenses,  pay  the  interest  on  its 
obligations,  and  declare  a dividend  to  stockholders.  * * * 
What  the  company  is  entitled  to  ask  is  a fair  return  upon  the 
value  of  that  which  it  employs  for  the  public  convenience.  On 
the  other  hand,  what  the  public  is  entitled  to  demand  is  that  no 
more  be  exacted  from  it  for  the  use  of  a public  highway  than 
the  services  rendered  by  it  are  reasonably  worth.” 

The  phrase  under  consideration  was  very  carefully  analyzed 
by  the  Supreme  Court  of  Maine  in  Water  District  vs.  Water 
Company , supra:  “They  (water  company)  are  entitled  to 
charge  reasonable  rates.  ‘Reasonable’  is  a relative  term  and 
what  is  reasonable  depends  upon  many  varying  circumstances. 
An  equivalent  to  the  prevailing  rate  of  interest  might  be  a 
reasonable  return  and  it  might  not ; it  might  be  too  high  or  too 


PUGET  SOUND  ELECTRIC  RY— OPINION 


21 


low ; it  might  be  reasonable  owing  to  peculiar  hazards  or  diffi- 
culties in  one  place  to  receive  greater  returns  there  than  it  would 
in  another  upon  the  same  investment.  Then,  their  reason- 
ableness relates  to  both  the  company  and  the  customer.  Rates 
must  be  reasonable  to  both,  and  if  they  cannot  be  to  both,  they 
must  be  to  the  customer.  That  the  amount  of  the  investment 
does  not  control  either  way  is  decided  in  Syndicate  Land  $ 
Town  Company  vs.  Jasper,  189  U.  S.  139.  * * * The  public — 
that  is,  the  customers — may  demand  that  the  rate  shall  be  no 
higher  than  the  services  are  worth  to  them,  not  in  the  aggregate, 
but  as  individuals.  The  value  of  the  service  in  itself  is  to  be 
considered  and  not  exceeded.  The  company  engages  in  a volun- 
tary enterprise.  It  is  not  compelled  at  the  outset  to  enter  into 
the  undertaking.  It  must  enter,  if  at  all,  subject  to  the  con- 
tingencies of  the  business  and  subject  to  the  rule  that  its  rates 
must  not  exceed  the  value  of  the  service  rendered  to  its  custo- 
mers. * * * The  company  is  only  entitled  to  fair  returns  in 
any  event  and  ‘fair’  to  the  customer  as  well  as  to  itself.  In  the 
aspect  now  being  considered  the  worth  of  the  waiter  service  to 
its  customers  does  not  mean  what  it  would  cost  some  one  indi- 
vidually or  some  few  individuals  to  supply  themselves,  for  one 
might  be  blessed  with  a spring  and  another  might  have  a good 
well ; it  means  the  worth  to  the  individuals  in  a community  taken 
as  a whole ; it  is  the  worth  to  the  customers  not  as  individuals 
but  as  individuals  making  up  a community  of  water  takers.” 

In  Delaware  State  Grange  vs.  New  York  P.  N.  R.  Co., 
Interstate  Commerce  Commission , supra,  the  Commission  says : 
“Conceding  always  that  the  carrier  renders  its  service  for  hire 
and  is  entitled  to  fair  remuneration,  which  must  necessarily 
include  the  cost  of  the  service,  a contribution  to  fixed  charges, 
and  something  besides  in  the  form  of  profit,  the  question  arises, 
how  large  a carrier’s  margin  of  profit  should  be  to  render  its 
charges  reasonable  to  the  patrons  whom  it  serves.  It  is  mani- 
festly quite  as  important  on  public  grounds  that  the  citizens 
who  furnish  a carrier  with  business  from  the  pursuits  in  which 
they  are  engaged  should  not  be  oppressed  with  rates  that  are 


22 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


disastrous  to  their  pursuits  as  that  a carrier  should  not  be  re- 
quired to  perform  its  services  at  a loss.  The  public  good  re- 
quires that  benefits  as  well  as  burdens  shall  be  justly  distributed, 
and  that  one  interest  shall  not  profit  unduly  at  the  expense 
and  to  the  serious  prejudice  of  another.  This  is  the  spirit  of 
the  law.  A carrier  has  the  peculiar  advantage  of  being  able 
to  apportion  its  aggregate  expense  upon-  its  whole  business,  but 
a grower  of  fruit  or  of  grain  or  a manufacturer  cannot  do  so. 
The  product  he  markets  must  alone  bear  the  transportation  ex- 
pense, and  if  this  is  excessive  and  deprives  him  of  any  return 
upon  his  investment  or  from  his  labor  or  skill,  his  business  is 
ruined  and  a public  injury  is  sustained.  * * * A carrier  can- 
not expect  to  absorb  so  much  of  the  market  price  in  its  charges 
that  the  producer  will  be  obliged  to  abandon  his  business.  It 
is  not  meant  by  that  that  a carrier  should  transport  freight  at 
a loss  to  itself.  If  a market  cannot  be  reached  except  at  a loss 
with  freight  upon  which  only  a just  transportation  rate  is 
charged,  it  is  no  longer  a legitimate  article  of  commerce,  and  a 
carrier  is  under  no  duty  to  transport  it  at  his  own  expense.  But 
the  principle  intended  to  be  impressed  is  that  if  a rate  is  so 
high  as  to  yield  a large  profit  to  a carrier  and  to  deprive  its 
patrons  of  any  profit  and  make  their  business  ruinous,  then  the 
interests  of  its  patrons  and  the  general  public  interests  as  well 
require  the  carrier  to  remit  a portion  of  its  profits,  and  ac- 
cept a rate  more  equitable  both  to  carrier  and  patron.  This  is 
indispensible  to  make  a rate  reasonable  and  just.” 

In  Thurber  vs.  New  York  Central  and  Hudson  River  R.  R: , 
supra , the  Interstate  Commerce  Commission  used  the  following 
language:  “The  public  character  of  carriers  and  the  public 
interests  affected  beneficially  or  injuriously  by  the  condition  of 
the  service  rendered  require  a just  degree  of  consideration  for 
those  interests,  and  in  general  it  is  believed  they  are  not  disre- 
garded, though  in  some,  and  perhaps  many,  instances  injustice 
may  be  done  by  too  much  concern  for  the  carrier  and  too  little 
for  the  public.  As  was  said  in  the  second  annual  report  ( ante 
p.  253),  the  Commission  has  laid  down  the  principle  that  the 


PUGET  SOUND  ELECTRIC  RY.— OPINION 


carriers  in  making  rates  cannot  arrange  them  from  an  exclu- 
sive regard  to  their  own  interest,  but  that  they  must  respect 
the  interests  of  those  who  may  have  occasion  to  employ  their 
services,  and  subordinate  their  own  interests  to  the  rules  of 
relative  equality  and  justice  which  the  act  prescribes.” 

Other  citations  are  unnecessary. 

We  will  refer  briefly  to  the  testimony  that  we  deem  ap- 
plicable to  and  bearing  upon  the  principle  just  discussed.  The 
testimony  is  practically  undisputed  that  from  60  to  90  per  cent, 
of  the  heads  of  families  living  in  the  towns  and  villages  described 
in  the  foregoing  statement  as  suburban  obtain  their  livelihood 
as  wage-earners,  as  clerks,  mechanics  and  laborers,  in  the 
cities  of  Seattle  and  Tacoma ; that  they  own  or  are  paying  for 
their  homes  on  the  monthly  installment  plan.  That  under  the 
rate  of  fares  prior  to  October  17,  1909,  it  would  be  as  cheap 
or  cheaper  for  them  to  occupy  their  homes  as  to  live  in  suburbs 
of  Seattle  and  Tacoma  and  pay  the  8 cents  a day  for  street 
car  fare,  but  that  under  the  increased  rates  they  could  not  afford 
to  live  in  their  homes,  but  per  force  must  abandon  them  and 
find  homes  at  points  reached  by  the  cheaper  street-car  lines. 
That  they  were  induced  to  purchase  and  settle  in  these  suburban 
towns  by  reason  of  the  long-continued  rate  and  relying  upon  the 
presumption  that  such  long-continued  rate  would  not  be  in- 
creased. That  practically  100  families  had  already  left  and 
abandoned  their  homes  in  these  towns  and  many  others  were 
awaiting  the  determination  of  this  hearing,  intending  to  leave 
if  relief  was  not  granted  from  the  increased  rates.  In  the 
language  of  Justice  Savage,  what  is  this  service  worth 
to  the  patrons  as  individuals,  but  as  individuals  mak- 
ing up  a community  of  constant  travelers?  It  clearly  is 
worth  no  more  than  they  can  pay  and  live,  and,  under  this 
testimony,  they  cannot  live  and  pay  more  than  the  old  rates. 
It  is  not  the  purpose  of  the  Commission  to  intimate  that  a rate 
less  than  the  cost  of  the  particular  service  should  or  would  be 
enforced  in  any  case.  If  traffic  cannot  pay  the  movement  cost, 
it  ought  not  to  become  a burden  upon  the  other  traffic.  It  will 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


24 


not  be  contended,  however,  that  the  old  rates  did  no  more  than 
compensate  for  the  moving  cost.  The  evidence  clearly  estab- 
lishes that  the  present  rates  to  the  suburban  towns  are  more  than 
the  service  is  worth  to  the  patrons.  Earlington  and  Renton 
stand  in  a little  different  position.  The  value  of  the  service  to 
these  people  is  affected  by  the  competition,  and  as  to  Earling- 
ton, semi-competitive  service  of  the  Seattle,  Renton  & Southern 
Railway.  The  evidence  shows  that  Earlington  is  populated 
by  wage-earners,  and  while  the  defendant  company’s  line  runs 
through  the  town,  the  inhabitants,  in  order  to  make  both  ends 
meet,  walk  a distance  of  from  a mile  to  a mile  and  a half  to  take 
advantage  of  the  lower  rate  on  the  other  road.  At  Renton  a 
very  large  number  (but  not  so  large  a per  cent.)  are  wage- 
earners  in  Seattle,  and  at  the  present  time  practically  all  travel 
via  the  competitive  line,  which  continues  to  charge  the  former 
rates.  Puyallup  occupies  a situation  similar  to  Renton  except 
that  the  Tacoma  Railway  & Power  Company  has  advanced  its 
rates  to  meet  the  advance  of  the  defendant  company,  but  with 
the  additional  equity  that  at  the  time  of  securing  the  franchise 
to  lay  its  tracks  along  the  streets  of  Puyallup  the  defendant 
company,  through  its  manager,  indirectly  promised  that  the 
then  rate  of  15  cents  and  25  cents  for  the  single  and  round- 
trip  fare  respectively  would  not  be  exceeded  if  the  provision 
limiting  the  fare  to  that  amount  were  not  inserted  in  the 
franchise. 

The  evidence  introduced  before  the  Commission  further 
demonstrates  that  throughout  the  country  what  might  be  termed 
suburban  fares  out  of  populous  centers  are  less  than  the  local 
fares  between  the  stations  on  the  line  and  less  than  the  fares 
charged  for  a longer  distance  over  the  same  tracks  when  in 
point  of  distance  the  suburban  district  is  passed.  An  examina- 
tion of  the  tariffs  of  interurbans  throughout  the  country  filed 
with  the  Commission  in  this  case  demonstrates  that  while  out 
of  populous  centers  the  rate  of  fare  is  as  low  and  in  several 
instances  lower  than  the  old  rate  to  points  out  of  and  suburban 
to  Seattle  and  Tacoma,  the  rates  between  local  points  and 
the  rates  after  the  suburban  point  is  passed  is  generally  not 


PUGET  SOUND  ELECTRIC  RY— OPINION 


25 


less  than  two  cents  per  mile.  A few  instances  will  suffice.  On  the 
Ohio  Electric  Railroad  the  line  leading  from  Lima  to  Fort 
Wayne,  a distance  of  64.8  miles,  the  road  runs  through  Elida, 
Delphos,  Middlepoint,  Van  Wert,  Convoy,  Dixon,  Monroeville 
and  New  Haven,  the  rate  between  local  points  being  an  aver- 
age of  two  cents  per  mile;  from  Lima  to  Toledo,  running 
through  a large  number  of  towns,  the  same  two-cent  rate  pre- 
vails ; from  Cincinnati  to  Dayton,  running  through  towns  hav- 
ing a population  as  shown  by  the  census  of  1900  of  453,487, 
the  rate  between  local  stations  is  two  cents  per  mile ; that  on  the 
Orchard  Lake  division  of  the  Detroit  United  Railway  the  local 
fare  between  intermediate  stations  is  two  cents  per  mile.  Out  of 
Detroit,  however,  the  suburban  rate  applies  at  a much  lower 
rate.  On  the  Columbus-Zanesville  division  of  the  Ohio  Elec- 
tric Railway  the  rate  between  stations  intermediate  and  not  in- 
cluding Columbus  is  practically  two  cents  per  mile.  On  the 
Indiana  Union  Traction  Company,  leading  out  of  Indian- 
apolis, the  local  fare  between  stations  intermediate  is  two  cents 
a mile.  Numerous  other  instances  might  be  quoted,  but  it  is 
sufficient  to  say  that  the  rate  on  all  interurban  lines  for  inter- 
mediate stations  (and  stations  not  figured  as  suburban)  aver- 
ages, throughout  the  country,  two  cents  per  mile. 

Many  features  must  be  considered  in  determining  whether  a 
rate  is  or  is  not  reasonable.  The  whole  schedule  must  be  con- 
sidered when  judging  its  fairness  to  the  company,  and  if  from 
all  its  revenue  it  receives  but  a fair  return  and  the  patron  is 
charged  no  more  in  each  particular  case  than  the  service  is 
worth,  per  se  the  rates  cannot  be  said  to  be  unreasonable. 

The  conclusion  reached  by  the  Commission  will  result  in  the 
occasional  traveler  from  the  points  not  deemed  suburban  pay- 
ing a greater  rate  per  passenger  mile  than  will  the  traveler 
within  such  suburban  district.  This  is  an  apparent  but  not  a 
real  discrimination;  the  discrimination  is  not  unjust,  nor  are 
the  points  outside  the  suburban  district  subjected  to  undue 
prejudice.  The  entire  community  is  interested  in  the  owners 
of  the  suburban  homes  being  able  to  use  and  occupy  them, 
in  the  building  up  of  such  points  and  relieving  the  congested 


26 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


condition  of  the  cities.  The  traveler  from  the  district  not 
suburban  is  entitled  to  be  carried  at  a reasonable  rate,  but  not 
necessarily  as  cheaply  per  passenger  mile  as  the  resident  of  the 
more  favored  district.  The  Interstate  Commerce  Commission 
on  this  point  says : “The  granting  of  commutation  rates  for 
suburban  travel  is  quite  general,  and  such  rates  are  defensible 
on  various  grounds.  They  tend  to  benefit  the  public  by  per- 
mitting and  inducing  residence  at  considerable  distance  from  the 
place  of  occupation,  thus  aiding  the  territorial  growth  of 
cities  and  relieving  their  congested  districts.” 

Spriggs  vs.  Baltimore  $ Ohio  By.,  I.  C.  C.  448. 

A comparison  of  the  rate  charged  generally  for  a specific 
service  of  other  roads  under  normal  conditions,  together  with  a 
comparison  of  the  relation  of  such  rates  both  to  the  carrier  and 
the  shipper,  furnish  a good  test  to  judge  of  the  reasonableness 
of  such  particular  rate.  We  can.  see  no  reason  why  if  local 
rates  on  roads  through  the  older  settled  portions  of  the  country 
at  two  cents  are  deemed  reasonable  and  are  generally  charged, 
that  a similar  rate  between  local  intermediate  points  not  subur- 
ban on  the  defendant’s  line  would  be  per  se  unreasonable  or 
excessive  unless  the  company  was  earning  more  than  a reasonable 
return  on  the  value  of  its  property. 

Residents  of  Seattle  and  Tacoma  have  the  advantage  of  water 
competition  when  desirious  of  traveling  between  these  points, 
with  a two-hour  service,  and  unless  the  rate  is  per  se  excessive, 
the  evidence  shows  no  extraordinary  or  peculiar  circumstances  to 
exist  calling  for  the  reduction  of  this  charge. 

The  defendant  is  now  issuing  commutation  tickets  good  be- 
tween Seattle  and  Tacoma  and  suburban  points  at  greatly 
reduced  rates  over  the  regular  tariff,  which  it  claims  meets  the 
needs  of  the  clerks  and  mechanics,  laborers  and  other  constant 
travelers.  Such  commutation  tickets  are,  however,  issued  in 
books  of  50  rides,  not  transferable,  void  after  one  month  if  not 
used.  The  evidence  discloses  that  very  many  of  these  laborers 
would  be  employed  on  an  average  of  but  four  days  a week,  con- 
sequently the  commutation  ticket  could  not  be  fully  used  up, 


PUGET  SOUND  ELECTRIC  RY. — OPINION 


27 


thus  prohibiting  its  purchase  and  use.  The  rates  charged  for 
commutation  tickets  are  practically  1.4  cents  per  passenger 
mile. 

Reference  to  the  effect  on  the  defendant  company  of  a re- 
duction in  rates  to  the  points  named  as  suburban  towns  might 
not  be  out  of  place.  Under  the  evidence  in  this  case  these  towns 
will  be  largely  depopulated  and  travel  consequently  greatly 
decreased  if  the  present  rates  are  maintained.  This  can  only 
operate  in  a diminution  of  the  net  receipts  of  the  company,  and, 
considering  alone  the  interests  of  the  defendant,  these  subur- 
ban rates  should  be  reduced  to  a point  where  the  people  can 
afford  to  occupy  the  homes  which  they  have  and  are  procuring. 

As  shown  by  the  findings  heretofore  referred  to,  based  on  the 
business  for  the  past  year,  the  through  passenger  business 
between  Seattle  and  Tacoma  furnished  56.8  per  cent,  of  the 
total  passenger  revenue,  or  $285,026.05  per  year.  Mr.  Dim- 
mock,  manager,  and  Mr.  Laffin,  district  manager,  both  testi- 
fied that  in  their  judgment,  based  upon  the  experience  gained 
under  the  new  rates  which  have  been  in  force  for  four  months, 
that  when  conditions  are  normal  they  will  carry  comparatively 
an  equal  number  of  passengers  between  these  points  at  the  ad- 
vanced rate  as  they  would  under  the  old  rate.  The  increase  in 
this  rate  is  practically  23.37  per  cent.,  and  under  these  rates  the 
net  earnings  would  be  increased  from  this  source  alone  $66,- 
610.59  per  year.  It  will  be  impossible  to  demonstrate  the 
amount  received  by  the  company  from  fares  between  local 
points,  as  conductors  have  not  kept  an  account  of  such  sales 
in  the  past,  but  have  turned  all  such  collections  in  as  local 
fares ; but  unquestionably  the  increase  from  single  trip  pas- 
sengers will  amount  to  a sum  in  excess  of  the  $3,000.00  esti- 
mated in  the  findings. 

The  managers  of  the  defendant  company’s  line  are  also 
managers  of  the  Seattle  Electric  Company,  through  which  track- 
age rights  into  Seattle  are  gained,  and  they  are  also  managers 
and  the  defendant  company  practically  owns  the  Tacoma  Rail- 
way & Power  Company,  with  which  it  has  trackage  rights 
into  Tacoma;  and  they  also  manage  the  Puget  Sound  Power 


28 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Company,  from  which  the  defendant  purchases  its  power.  These 
facts  necessitated  the  most  careful  scrutiny  into  the  reason- 
ableness and  fairness  of  the  different  contracts,  and  we  will  now 
briefly  discuss  these  contracts.  Investigation  of  the  settle- 
ments made  between  the  defendant  and  the  Tacoma  Railway  & 
Power  Company  and  the  Seattle  Electric  Company  convinces 
the  Commission  that  the  accounting  officers  have  misconstrued 
the  contract  between  the  parties  to  the  detriment  of  the  de- 
fendant company.  The  present  contract  provides  for  the  leas- 
ing by  the  defendant  to  the  Seattle  Electric  Company  of  cer- 
tain tracks,  and  its  trains  and  equipment  after  the  same  have 
reached  the  old  south  boundary  line  of  Seattle,  between  500  and 
600  feet  south  of  Spokane  avenue;  provides  for  the  Seattle 
Electric  Company  operating  such  trains  within  the  city  limits, 
and  that  it  should  be  entitled  to  all  the  earnings  therefrom. 
It  provides  that  whenever  the  defendant  sells  a ticket  or  collects 
a fare  entitling  the  purchaser  to  transportation  within  the  city 
of  Seattle,  the  defendant  shall  be  charged  with  5 cents,  or  such 
proportionate  amount,  where  the  purchaser  is  entitled  to  trans- 
portation under  the  franchise  of  the  Seattle  Electric  Company 
at  less  than  full  cash  fare  and  such  lesser  fare  only  is  collected. 
Provision  is  made  for  an  accounting  each  month.  Section  10  of 
the  contract  reads  as  follows:  “The  Seattle  company  will  also 
during  the  life  of  this  contract  pay  to  the  interurban  company 
for  the  trackage  rights  granted  to  it  by  the  interurban  com 
pany  and  for  the  use  of  the  leased  cars  and  trains  * * * a sum 
equal  to  3%  cents  for  each  passenger  carried  on  such  leased 
cars  within  the  city  limits  of  the  city  of  Seattle  north  of  the  old 
city  limits,  paying  full  cash  fare  and  a proportionate  part  of 
such  sum  when  passenger  is  entitled  under  the  franchise  of  the 
Seattle  Company  to  transportation  on  the  cars  of  the  Seattle 
Company  at  less  than  full  cash  fare  and  pays  such  lesser  fare 
only.” 

Under  the  contract  existing  prior  to  July  1st,  1909,  the  de- 
fendant collected  the  fares  for  transporting  the  passengers 
within  the  city  of  Seattle,  and  such  fares  became  a part  of  its 


PUGET  SOUND  ELECTRIC  RY— OPINION 


29 


gross  passenger  revenue,  the  amount  to  be  paid  to  the  Seattle 
Electric  Company  being  operating  expenses,  and  so  charged. 
Under  the  new  contract  this  operating  expense  is  wiped  out 
and  the  amount  paid  the  defendant  by  the  Seattle  Electric 
Company  is  treated  as  revenue,  the  gross  revenue  being  re- 
duced by  the  difference  between  five  cents  formerly  credited  and 
the  3%  cents  now  received. 

The  defendant  in  its  annual  report  to  the  Commission  for  the 
year  ending  June  30,  1909,  treated  this  contract  as  retro- 
active for  the  whole  fiscal  year  in  so  far  as  the  method  of  treat- 
ing operating  expenses  and  gross  revenue  was  concerned.  The 
settlements  as  made  show  that  the  number  of  passengers  pre- 
senting transfers  showing  a cash  fare  of  5 cents  paid  conductors 
of  the  Seattle  Electric  Company  and  the  Tacoma  Railway  & 
Power  Company  were  first  deducted  from  the  total  number  of 
passengers  carried  within  the  city,  and  two  cents  (the  amount 
provided  in  the  old  contract)  per  passenger  was  allowed  the  de- 
fendant on  the  balance  of  the  passengers  carried,  no  credit 
whatever  being  given  for  passengers  carried  in  such  leased  cars 
presenting  such  transfers.  The  Commission  feels  that  the  old 
contract  will  not  bear  such  construction,  but,  irrespective  of  the 
construction  placed  upon  the  old  contract,  the  present  contract 
can,  under  no  circumstances,  bear  the  construction  which  the 
accounting  officers  have  placed  upon  it ; but  the  defendant  com- 
pany is  entitled  to  receive  for  the  use  of  its  leased  cars  three 
and  one-fourth  cents  for  each  passenger  carried  in  such  cars 
within  the  limits  of  the  city.  This  mode  of  settlement  has  been 
continued  from  July  1st  to  the  present  time,  crediting,  however, 
3t4  cents  per  passenger,  and  no  credit  whatever  has  been  given 
for  carrying  passengers  on  such  leased  cars  within  the  limits 
of  the  cities  where  the  transfers  have  been  issued  by  conductors 
of  the  terminal  lines.  That  during  the  fiscal  year  ending  June 
30,  1909,  there  were  224,045  passengers  so  carried  within  the 
city  of  Seattle,  the  defendant  company  receiving  nothing  from 
the  Electric  Company  for  so  carrying  them  in  the  leased  cars. 
And  there  were  carried  within  the  city  of  Tacoma  during  said 
time  65,462  passengers  for  which  the  defendant  company  re- 


so 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


ceived  no  compensation.  Had  the  present  contract  been  in 
force  and  observed  the  net  earnings  of  the  defendant  company 
from  this  construction  of  the  contract  alone  would  have  been 
increased  from  the  Seattle  end  $4,480.90  and  from  the  Tacoma 
end  $1,309.24.  If  the  same  number  of  passengers  are  carried 
during  the  present  fiscal  year  as  were  carried  for  1909,  the  net 
increase  arising  from  allowing  3%  cents  instead  of  two  cents 
per  passenger  in  Seattle  will  amount  to  an  additional  $26,484.54 
less  two  per  cent,  gross  income  city  tax  on  the  increased  amount 
received. 

By  letting  the  present  rate  stand  between  Seattle  and  Ta- 
coma, and  conceding  the  judgment  of  the  manager  and  district 
manager  to  be  correct,  the  increase  from  through  business  should 
be  not  less  than  $66,610.59 ; the  increase  from  the  changed 
contract  with  the  terminal  companies,  by  which  the  defendant 
receives  3%  cents  instead  of  two  cents  as  before,  will  net  it  not 
less  than  $26,434.54.  A proper  construction  by  the  accounting 
officers  by  which  3^4  cents  is  allowed  for  passengers  paying  cash 
fare  to  the  terminal  companies  will  further  increase  its  revenue 
approximately  $5,790.14,  making  a total  increase  in  revenue 
over  the  preceding  year,  assuming  that  the  same  volume  of  busi- 
ness is  carried  on,  of  $98,885.27,  and,  in  addition  to  this,  will 
be  the  increased  revenue  derived  from  the  travel  to  the  points 
not  treated  as  suburban  and  not  taking  advantage  of  the  com- 
mutation provision  hereinafter  provided  for,  estimated  in  the 
findings  at  $3,000.00.  The  Commission  is  satisfied  that  this 
increase  will  more  than  make  up  the  deficit  figures  on  the  1909 
business,  and  hereinbefore  specifically  set  out. 

The  Commission  has  not  in  estimating  the  future  operating 
expenses  of  the  defendant  been  unmindful  of  the  probable  neces- 
sity in  the  near  future  of  advancing  the  wages  of  its  employes 
to  meet  the  increased  and  increasing  cost  of  living.  The 
amount  paid  in  wages,  however,  amounts  to  approximately  24 
per  cent,  of  the  operating  expenses,  or  $100,000.00,  and,  judg- 
ing the  future  increase  in  business  by  the  constantly  increasing 
business  of  the  past,  any  reasonable  advance  in  wages  should  be 
more  than  offset  by  the  increased  revenue  due  to  development  of 


PUGET  SOUND  ELECTRIC  RY— OPINION 


31 


the  territory  traversed,  the  growth  of  the  cities  and  the  addi- 
tional travel  resulting  therefrom.  The  Commission  scrutinized 
the  contract  entered  .into  between  the  defendant  company  and 
the  power  company.  A copy  of  the  contract  is  on  file  with  the 
Commission,  and  provides  that  the  defendant  shall  pay  $2.23  per 
killowatt  per  month  for  the  full  amount  of  4,750  killowatts  for 
power  delivered  on  the  defendant’s  right-of-way  at  its  power 
stations.  This  amounts  to  $20.16  per  horse  power  per  year. 
The  Commission  has  inquired  carefully  into  the  charges  made  by 
all  power  companies  selling  power  within  the  state,  and  are 
satisfied  that  the  contract  is  as  cheap  as  any  other  company  is 
selling  its  power  under  similar  conditions.  The  fact  that  the 
managers  of  the  corporation  might  be  the  same  in  no  wise  demon- 
strates that  the  stockholders  are  the  same.  The  evidence  in 
this  case  shows  that  Stone  & Webster  and  their  immediate 
clients  hold  but  25  per  cent  of  the  capital  stock  and  bonded  in- 
debtedness of  the  Puget  Sound  Electric  Railway,  the  remain- 
ing bonds  and  stocks  being  owned  by  Lee  Higginson  & Com- 
pany, Kidder,  Peabody  Company,  and  Forbes  Company,  and 
their  immediate  clients. 

The  inquiry  in  such  cases  must  be  confined  as  to  whether 
the  defendant  company  is  paying  more  than  a fair  price  for  its 
power,  and  on  this  point  the  Commission  is  satisfied  with  the 
fairness  of  the  contract. 

We  have  fully  appreciated  that  the  development  of  the  state 
will  be  greatly  aided  by  the  building  of  interurban  lines  of  elec- 
tric railways ; that  large  capital  is  necessary  for  such  purpose, 
and  that  a policy  should  be  adopted  by  the  executive  officers  of 
the  state  that  will  not  deter  capital  investing  in  such  enterprises. 

It  was  urged  during  the  hearing  that  a reduction  in  the  rates 
could  only  have  the  effect  of  discouraging  capital  from  seeking 
this  state  for  investment  in  public  service  corporations. 

The  Commission  believes  that  a policy  by  which  the  incre- 
ment growing  from  the  development  of  the  valleys  and  regions 
so  opened  by  similar  construction  is  added  to  and  becomes  a 
part  of  the  sum  on  which  a return  is  calculated,  and  upon  this 
increased  amount  a net  return,  after  ample  allowance  for  de- 


32 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


preciation  and  exigencies,  of  7 per  cent.,  is  allowed,  will  be  as 
attractive  to  capital  as  any  legitimate  investment  in  the  coun- 
try. 

The  following  order  is  entered : 

BEFORE  THE  RAILROAD  COMMISSION  OF 
WASHINGTON. 

[No.  76.] 

The  Railroad  Commission  of  Washington,  ex  rel.  W.  H. 

Paulhamus,  Complainant , v.  Puget  Sound 
Electric  Railway,  Defendant. 

ORDER. 

This  cause  coming  on  regularly  to  be  heard  and  it  appearing 
to  the  Commission  that  the  cause  has  been  duly  and  regularly 
tried,  that  findings  of  fact  have  been  made  in  writing  and  are 
now  on  file  herein,  and  the  cause  having  been  duly  submitted 
to  the  Commission  and  the  Commission  being  fully  advised  in 
the  premises, 

It  is  now  Ordered,  That  the  present  round-trip  fare,  being 
twice  the  single  published  rate  from  Seattle  to  points  south  of 
Englewood  and  as  far  south  as  and  including  Renton  Junction, 
and  from  Tacoma  to  points  north  of  Tidehaven  and  as  far 
north  as  and  including  Algona,  be  and  the  same  are  hereby  de- 
clared to  be  unjust,  unreasonable  and  excessive,  and  it  is  or- 
dered that  the  same  be  not  hereafter  charged  to  persons  desir- 
ing round-trip  tickets  between  such  points,  and  in  lieu  thereof 
and  to  take  the  place  of  such  charges  it  is  ordered  that  the 
round-trip  rates  in  force  prior  to  the  17th  day  of  October,  1909, 
to  such  points,  be  reinstated,  published  and  charged  in  the 
future. 

That  the  present  round-trip  rates  between  Tacoma  and  points 
on  the  branch  line  between  Willow  Junction  and  Puyallup  be 
and  the  same  are  hereby  declared  to  be  unjust,  unreasonable 
and  excessive,  and  that  the  same  be  not  charged  in  the  future, 
and  to  take  the  place  of  such  round-trip  rates  between  Tacoma 
and  the  points  on  such  branch  line  the  round-trip  rates  and 


PUGET  SOUND  ELECTRIC  RY— ORDER 


33 


fares  charged  prior  to  October  17th,  1909,  be  reinstated,  pub- 
lished and  charged  in  the  future. 

That  the  present  round-trip  rates  being  twice  the  single  pub- 
lished rate  from  Seattle  to  Earlington  and  Renton,  be  and  the 
same  are  hereby  declared  to  be  unjust,  unreasonable  and  ex- 
cessive, and  that  the  same  be  not  charged  in  the  future,  and 
that  to  take  the  place  of  such  round-trip  rates  between  Seattle 
and  such  points  there  be  charged  in  the  future  a round-trip 
rate  between  such  points  not  to  exceed  thirty  cents  between 
Seattle  and  Earlington  and  thirty-five  cents  between  Seattle 
and  Renton. 

That  the  round-trip  rates  between  Seattle  and  points  other 
than  those  above  named  and  between  Tacoma  and  said  last 
named  points  charged  prior  to  October  17th,  1909,  be  rein- 
stated, published  and  charged  in  the  future,  unless  the  defend- 
ant company  agrees  to  issue  commutation  tickets  good  between 
Seattle  and  Tacoma  and  such  points  requiring  not  to  exceed 
32  rides  in  one  month  at  rates  for  single  rides  not  to  exceed 
one-half  the  charge  for  round-trip  tickets  prior  to  October  17th, 
1909,  and  in  the  event  of  the  defendant  company  filing  with  the 
Commission  within  twenty  days  from  this  date  its  tariff  pro- 
viding for  such  commutation  books  between  such  points,  then 
and  in  that  event  that  portion  of  this  order  providing  for 
round-trip  tickets  between  Seattle  and  points  on  the  main  line 
south  of  Renton  Junction  and  between  Tacoma  and  points  on 
the  main  line  north  of  Algona  shall  not  be  effective. 

It  is  further  ordered  that  that  portion  of  the  complaint  ask- 
ing for  a reduction  of  the  single  fare,  and  that  portion  asking 
for  a reduction  between  local  stations  and  not  touching  Seattle 
or  Tacoma  and  that  portion  asking  for  a reduction  between 
Seattle  and  Tacoma  be  and  the  same  is  hereby  denied. 

It  is  further  ordered  that  in  view  of  the  fact  that  if  the  rates 
herein  established  be  published  in  conjunction  with  the  rates 
now  existing  and  not  affected  by  this  order,  that  the  tariff  so 
published  will  be  inharmonious  and  will  result  in  the  combined 
sum  of  two  or  more  local  rates  between  terminals  being  less 
—3 


34 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


than  the  through  published  rates,  as  well  as  being  less  from 
points  near  the  suburban  limits  mentioned,  and  the  Commission 
feeling  that  a harmonious  tariff  consistent  with  this  order  can 
be  prepared,  and  believing  that  under  the  circumstances  the 
defendant  company  should  be  permitted  to  prepare  and  submit 
such  tariff  to  the  Commission,  it  is  further  ordered  that  the 
defendant  company  have  and  it  is  hereby  given  ten  days  from 
the  date  of  the  service  of  this  order  upon  it  to  prepare  and  file 
with  the  Commission  a new  complete  tariff  consistent  with  this 
order,  and  in  case  of  its  neglect  or  failure  so  to  do,  the  Com- 
mission will  at  the  expiration  of  such  time  issue  a supplemental 
order  providing  for  a new  and  complete  tariff  and  the  rates  to 
be  hereafter  charged  between  all  points  on  its  line. 

Witness  the  Railroad  Commission  of  Washington  this  26th 
day  of  February,  1910. 

The  Railroad  Commission  of  Washington, 

By  H.  A.  Fairchild,  Chairman. 

J.  C.  Lawrence,  Commissioner . 
Attest:  Jesse  S.  Jones,  Commissioner. 

F.  M.  Larned,  Secretary. 


PUGET  SOUND  ELECTRIC  RY  — FINDINGS 


35 


BEFORE  THE  RAILROAD  COMMISSION  OF 
WASHINGTON. 

[No.  76.] 

The  Railroad  Commission  of  Washington,  ex  rel  W.  H. 

Paulhamus,  Complainant , v.  Puget  Sound  Elec- 
tric Railway,  Defendant , Town  of  Puyallup, 
Intervenor. 

FINDINGS  OF  FACT. 

This  cause  coming  on  regularly  to  be  heard  before  the  Rail- 
road Commission  of  Washington,  pursuant  to  notice  duly  given 
on  the  complaint  of  the  plaintiff  at  the  time  specified  in  the  said 
notice,  the  plaintiff  appearing  by  H.  A.  Fairchild,  John  C. 
Lawrence  and  Jesse  S.  Jones,  and  by  W.  V.  Tanner,  assistant 
attorney  general,  as  counsel  for  the  plaintiff,  and  the  defendant 
appearing  by  B.  S.  Grosscup,  its  attorney,  and  all  parties  hav- 
ing announced  themselves  ready  to  proceed  with  the  hearing, 
whereupon  the  town  of  Puyallup,  by  B.  F.  Jacobs,  its  attorney, 
filed  its  complaint  in  intervention,  which  complaint  was  duly 
filed  and  a copy  thereof  served  upon  the  attorney  for  the  de- 
fendant, and  the  said  town  of  Puyallup  was  permitted  to  inter- 
vene and  its  appearance  was  duly  entered  in  said  cause  as  in- 
tervenor, whereupon  all  parties  again  announced  themselves 
ready  to  proceed  with  the  hearing,  and  evidence  having  been 
introduced  and  submitted  by  and  on  behalf  of  the  plaintiff,  by 
and  on  behalf  of  the  defendant  and  by  and  on  behalf  of  the 
intervenor,  and  each  of  the  parties  having  announced  that  they 
had  no  further  testimony  to  offer,  the  cause  being  duly  sub- 
mitted to  the  Commission  and  the  Commission  having  duly  con- 
sidered the  evidence  and  being  duly  advised  in  the  premises, 
does  now  make  and  render  the  following  findings  of  fact: 

Finding  No.  1. 

The  hearing  of  this  cause  having  been  consolidated  with 
cause  No.  74,  the  same  being  a hearing  for  the  purpose  of 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


ascertaining  the  value  of  the  property  used  by  the  defendant 
in  the  public  service  and  being  the  property  in  controversy  in 
this  cause,  in  so  far  as  the  taking  of  testimony  and  argument 
was  concerned,  and  findings  of  fact  having  been  duly  made  and 
rendered  in  said  valuation  hearing  upon  the  evidence  intro- 
duced and  heard  in  such  consolidated  cause,  and  such  findings 
having  been  duly  offered  in  evidence  in  this  cause,  the  same  are 
now  adopted  and  made  a part  of  the  findings  in  this  cause,  that 
is  to  say,  findings  numbered  1 to  and  including  finding  No.  31 
in  said  cause,  such  findings  being  in  the  words  and  figures  fol- 
lowing, to-wit: 


“BEFORE  THE  RAILROAD  COMMISSION  OF 
WASHINGTON. 

[No.  74.] 

The  Railroad  Commission  of  Washington,  Complainant , v. 

The  Puget  Sound  Electric  Railway,  Defendant. 

FINDINGS  OF  FACT. 

This  cause  coming  on  regularly  to  be  heard  before  the  Rail- 
road Commission  of  Washington  pursuant  to  notice  duly  given 
on  the  complaint  of  the  plaintiff  notifying  the  defendant  that 
at  this  time  and  place  a hearing  would  be  entered  upon  for  the 
purpose  of  ascertaining  the  value  of  its  property  used  in  the 
public  service,  the  plaintiff  appearing  by  H.  A.  Fairchild,  J.  C. 
Lawrence  and  Jesse  S.  Jones,  commissioners,  and  by  W.  V.  Tan- 
ner, assistant  attorney  general,  as  counsel  for  the  plaintiff,  the 
defendant  appearing  by  B.  S.  Grosscup,  its  attorney,  and  all 
parties  having  announced  themselves  ready  to  proceed  with  the 
hearing,  and  evidence  having  been  introduced  and  submitted  by 
and  on  behalf  of  the  plaintiff  and  by  and  on  behalf  of  the  de- 
fendant, and  each  of  the  parties  having  announced  that  they 
had  no  further  testimony  to  offer,  and  the  cause  being  duly 
submitted  to  the  Commission  and  the  Commission  having  duly 


PUGET  SOUND  ELECTRIC  RY—  FINDINGS 


37 


considered  the  evidence  and  being  fully  advised  in  the  premises, 
does  now  make  and  render  the  following  findings  of  fact : 

Finding  No.  1. 

That  the  defendant  Puget  Sound  Electric  Railway  is  a cor- 
poration organized  and  existing  under  and  by  virtue  of  the  laws 
of  New  Jersey,  and  has  complied  with  the  laws  of  the  State  of 
Washington  authorizing  it  to  conduct  and  carry  on  business 
in  the  State  of  Washington  as  a common  carrier  engaged  in 
the  operation  of  the  railway  lines  hereinafter  specifically  de- 
scribed. 

The  defendant  is  the  successor  in  interest  of  the  Seattle- 
Tacoma  Interurban  Railway.  That  the  Seattle-Tacoma  Inter- 
urban  Railway  was  a corporation  organized  under  the  laws  of 
the  State  of  Washington  for  the  purpose  of  constructing  a line 
of  electric  railroad  extending  from  Seattle  to  Tacoma.  It  was 
promoted  and  organized  by  a syndicate  composed  of  the  bank- 
ing houses  of  Stone  & Webster,  Lee,  Higginson  & Company, 
Kidder,  Peabody  & Company,  and  J.  M.  Forbes  & Company. 
That  each  of  said  banking  houses  agreed  to  advance  one-fourth 
of  the  cost  and  expense  incurred  in  the  construction  of  such 
road  and  each  was  to  own  a one-fourth  interest  in  the  enter- 
prise and  property.  For  the  purpose  of  securing  a basis  for  a 
stofck  and  bond  issue,  the  syndicate  entered  into  a contract  with 
Karl  G.  M.  Miller  for  the  construction  and  equipment  of  the 
line,  agreeing  to  deliver  to  Miller  in  payment  therefor  $1,- 
250,000  par  value  of  first  mortgage  bonds,  $400,000  par  value 
of  preferred  stock,  and  $1,249,300  par  value  of  common  stock 
of  the  Seattle-Tacoma  Interurban  Railroad.  Miller  was  not  the 
real  party  in  interest,  the  contract  being  performed  by  Stone 
& Webster  for  the  syndicate. 

The  syndicate  had  anticipated  the  cost  of  the  road  would  not 
exceed  $1,500,000  in  cash,  but  as  the  work  progressed  it  found 
it  necessary  to  raise  further  cash  to  an  amount  approximating 
$600,000,  and  a modification  of  the  so-called  Miller  contract 
was  made  as  the  basis  of  a further  issue  of  stock  and  bonds.  By 
this  modified  contract  Miller  was  to  receive  $1,250,000  of  bonds, 


38 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


$500,000  preferred  stock,  $1,499,300  of  the  common  stock,  and 
$500,543.98  of  promissory  notes  of  the  corporation. 

The  entrance  into  the  cities  of  Seattle  and  Tacoma,  without 
incurring  a large  expenditure  for  terminal  grounds,  tracks  and 
franchises  was  an  important  matter. 

Stone  & Webster  interests  had  the  control  in  the  management 
of  the  Seattle  Electric  Company’s  lines,  through  which  the 
syndicate  could  gain  an  entrance  into  Seattle.  About  this  time 
the  syndicate  conceived  the  idea  of  securing  control  of  the 
Tacoma  Railway  & Power  Company,  so  as  to  control  the 
entrance  into  Tacoma,  and  a majority  of  the  capital  stock  of 
the  said  last  named  company  was  bargained  for.  For  the  pur- 
pose of  a basis  for  a further  stock  and  bond  issue  to  raise 
money  to  cover  this  purchase,  a new  contract  was  entered  into 
with  J.  E.  Carroll,  by  which  Carroll  was  to  secure  all  of  the 
properties  and  securities  agreed  to  be  turned  over  to  Miller, 
was  to  complete  the  Miller  contract,  procure  $1,764,600  par 
value  of  the  stock  and  $298,087.14  of  the  outstanding  promis- 
sory notes  of  the  Tacoma  Railway  and  Power  Company,  pro- 
cure certain  timber  property  and  the  saw  mill  at  Milton  (pre- 
sumably purchased  and  owned  by  Miller,  but  purchased  by  the 
syndicate),  which  last  mentioned  property  had  cost  $106,514.90, 
and  furnish  $65,743.12  in  cash  and  cause  to  be  retired  and 
procure  the  second  mortgage  bonds  of  the  Tacoma  Railway  & 
Power  Company  (which  last  item  cost  the  sum  of  $119,503.71), 
and  upon  the  surrender  by  Carroll  of  the  above  mentioned  prop- 
erties and  securities  to  the  Puget  Sound  Electric  Railway,  which 
had  in  the  meantime  been  organized,  the  last  named  company 
was  to  turn  over  to  Carroll  (for  the  syndicate)  its  securities 
as  follows : Bonds,  $2,300,000  par  value ; preferred  stock, 
$624,100  par  value,  and  common  stock,  $3,273,400  par  value. 
Carroll  was  not  the  real  party  in  interest,  but  this  agreement 
was  carried  out  by  Stone  & Webster  for  and  representing  the 
syndicate. 

In  pursuance  of  this  agreement,  all  the  liabilities  of  the  Seat- 
tle-Tacoma  Interurban  Railway  were  turned  over  to  the  Puget 
Sound  Electric  Railway,  the  syndicate  received  the  securities  of 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


89 


the  Puget  Sound  Electric  above  specified,  and  by  indenture  the 
properties  of  the  Seattle-Tacoma  Interurban  Railway  were 
transferred  to  the  Puget  Sound  Electric  Railway,  and  the  Seat- 
tle-Tacoma Interurban  was  practically  dissolved. 

The  interurban  road  constructed  under  the  sp-called  Miller 
and  Carroll  contracts  consisted  of  a single  track  from  the  Seat- 
tle old  city  limits  to  the  Tacoma  old  city  limits,  amounting  to 
82.01  miles  of  track,  and  the  Renton  branch,  consisting  of  2.96 
miles  of  track,  and  was  formally  turned  over  to  the  Puget 
Sound  Electric  Railway  on  April  1st,  1908,  although  it  had 
been  operated  by  the  syndicate  since  September  26th,  1902. 

Since  the  property  was  turned  over,  the  Puget  Sound  Elec- 
tric Railway  has  double-tracked  a large  portioji  of  its  line,  con- 
structed the  Tideflats  line,  the  East  P street  line  and  constructed 
certain  lighting  plants  at  Kent,  Auburn,  Milton  and  other 
points  along  its  line ; has  procured  control  of  the  Tacoma  Rail- 
way & Power  Company,  the  Pacific  Traction  Company,  and 
loaned  a large  sum  of  money  to  the  Tacoma  Railway  & Power 
Company. 

The  cash  actually  paid  out  and  disbursed  by  the  syndicate 
for  the  acquisition  of  these  properties  was  the  sum  of  $6,542,- 
987.47,  disbursed  as  follows : 


Building  the  interurban  prior  to  April  1st,  1903 $1,942,657  54 

Money  subsequently  expended  completing  original  contract.  11,064  28 

Cash  paid  for  stock  of  T.  R.  & P.  Co 253,463  47 

Expended  for  mill  and  timber  lands 106,514  90 

Cash  expended  retiring  T.  R.  & P.  2nd  mortgage  bonds 31,503  71 

Interest  paid  during  construction 92,289  28 

Working  capital  407,488  61 

Cash  paid  for  stock  re  Pacific  Traction  Co 426  00 

Cash  paid  settlement  litigation  with  George  Blanchard 35,280  00 

Expended  in  additions  and  betterments 1,279,562  47 

Moneys  loaned  T.  R.  & P.  Co 2,382,687  27 


The  cash  so  expended  by  the  syndicate  was  received  from  the 


following  sources : 


Item. 


Par  Value. 


Amount 

realized. 


Preferred  stock 

Bonds  (sold  in  blocks) 
Bonds  (sold  abroad) . 

Bonds  

Convertible  notes 

Notes 

Current  notes  


$500,000  $384,500  00 

1.350.000  1,248,750  00 

950.000  871,009  54 

1.890.000  1,714,265  00 

500.000  448,750  00 

1,000,000  1,000,000  00 

615.000  584,250  00 


$6,251,524  54 


Total 


40 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


The  excess  of  the  amount  disbursed  over  the  amount  realized 
is  accounted  for  from  turning  in  the  profits  of  the  lighting 
plants,  reduction  of  working  capital,  and  the  surplus  between 
the  interest  paid  (6%)  by  the  Tacoma  Railway  & Power  Com- 
pany and  the  interest  on  the  bonds  (5%). 

Of  the  $1,942,657.54  above  mentioned  as  money  expended 
in  building  the  interurban,  $186,954.50  was  money  paid  Stone 
& Webster  by  the  syndicate  for  the  engineering  and  supervis- 
ing and  acting  as  purchasing  agents  and  managers  during  con- 
struction ; the  balance  appears  to  be  moneys  paid  out  for  ma- 
terial, labor  and  services  outside  of  any  member  of  the  syndicate. 

In  addition  to  the  properties  above  described  as  procured  for 
cash,  and  the  cash  payments  therefor,  the  defendant  company 
turned  over  the  following  of  its  securities  in  exchange  for  the 
following  properties : 

$1,774,300  par  value  of  its  common  stock  was  exchanged,  in 
addition  to  the  cash  payment  of  $253,463.47  above  mentioned, 
for  $2,000,000  par  value  of  the  common  stock  of  the  Tacoma 
Railway  & Power  Company,  the  Puget  Sound  Electric  Rail- 
way, in  addition,  guaranteeing  the  payment  of  the  principal  and 
interest  of  the  Tacoma  Railway  & Power  Company  bonds, 
amounting  to  $1,310,000  par  value. 

$198,800  par  value  of  its  common  stock  was  exchanged,  in 
addition  to  the  cash  payment  of  $426.00  above  mentioned,  for 
$250,000  par  value  of  the  preferred  stock  of  the  Pacific  Trac- 
tion Company,  and  $1,250,000  par  value  of  the  common  stock 
of  such  last  named  company,  the  defendant  company  guarantee- 
ing the  principal  and  interest  on  $400,000  par  value  of  the 
bonds  of  said  Pacific  Traction  Company. 

$88,000  par  value  of  the  defendant  company’s  first  mortgage 
bonds  were  exchanged,  in  addition  to  the  cash  payment  of  $31,- 
503.71  mentioned,  for  $114,812.50  par  value  of  the  Tacoma 
Railway  & Power  Company’s  second  mortgage  bonds. 

$74,000  par  value  of  the  defendant  company’s  first  mortgage 
bonds  were  exchanged  for  $74,000  par  value  of  the  Tacoma 
Railway  & Power  Company’s  first  mortgage  bonds. 

$190,000  of  the  Tacoma  Railway  & Power  Company’s  first 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


41 


mortgage  bonds  were  also  secured  by  the  Puget  Sound  Electric 
Railway  in  consideration  of  the  cash  advanced  above  mentioned. 

Finding  No.  2. 

The  Puget  Sound  Electric  Railway  owns  the  following  lines 
of  electric  railway,  viz. : 

A line  extending  from  the  old  city  limits  of  Seattle  at  Spokane 
avenue  to  the  old  city  limits  of  Tacoma  at  Bay  street,  consisting 
of  32.01  miles  of  main  track  and  10.91  miles  of  second  track  and 
8.24  miles  of  sidings ; a line  extending  from  Renton  Junction  to 
Renton,  consisting  of  2.96  miles  of  main  single  track  and  1.38 
miles  of  sidings;  a line  extending  from  Willow  Junction  to 
Puyallup,  consisting  of  6.94  miles  of  single  track  and  .6  miles 
of  sidings ; what  is  known  as  the  East  P street  line  in  Tacoma, 
consisting  of  1.11  miles  of  single  main  track  and  .11  miles  of 
sidings ; what  is  known  as  the  Tideflats  line  in  Tacoma,  con- 
sisting of  .58  miles  of  single  main  track  and  .13  miles  of  sid- 
ings, and  the  old  Puyallup  line,  extending  from  Fern  Hill,  near 
the  city  of  Tacoma,  to  Puyallup,  consisting  of  9.7  miles  of  main 
track  and  9.86  miles  of  sidings  and  spurs.  All  of  the  above 
described  lines,  with  the  exception  of  the  line  described  as  the 
old  Puyallup  line  and  the  East  P street  line,  are  operated  by 
the  defendant  company,  and  said  old  Puyallup  line  and  said 
East  P street  line  are  leased  to  and  operated  by  the  Tacoma 
Railway  & Power  Company. 

Finding  No.  3. 

That  the  accounting  records  of  the  defendant  company  show 
that  the  property  last  above  described,  with  the  exception  of 
the  old  Puyallup  line,  including  equipment,  cost,  down  to  the 
30th  day  of  June,  1909,  the  sum  of  $3,710,805.15;  that  in- 
cluded in  such  amount  are  the  following  items,  to-wit : 

$305,929.50  apportioned  from  the  total  discounts  claimed  to 
have  been  incurred  by  the  company  on  all  moneys  borrowed,  and 
which  it  is  claimed  is  applicable  to  the  cost  of  the  lines  operated 
by  the  defendant  company. 

$9,536.58  cost  of  the  P street  line,  which  is  not  operated  by 
the  defendant  company. 


42 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


$10,151.57  expended  in  the  extension  of  the  P street  line,  but 
which  is  not  operated  by  the  defendant  company. 

$44,098.81  expended  in  repairing  damage  from  floods  occur- 
ring in  the  winters  of  1902  and  1908,  after  the  road  was  in 
operation,  and  which  is  properly  chargeable  to  maintenance, 
and  the  sum  of 

$407,234.00  advanced  in  cash  as  working  capital,  leaving  the 
sum  of  $2,933,863.69  cash  expended  by  the  defendant  company 
in  constructing  its  line. 

That  the  line  known  as  the  old  Puyallup  line  was  purchased 
by  the  defendant  company  from  the  Tacoma  Railway  & Power 
Company  for  the  sum  of  $150,000.00,  but  said  line  is  leased  to 
and  operated  by  the  Tacoma  Railway  & Power  Company. 

Finding  No.  4. 

That  in  addition  to  the  lines  of  railroad  above  described  as 
being  owned  by  the  defendant,  such  company  owns  the  following 
properties,  to-wit: 

$2,000,000  par  value  of  the  common  stock  of  the  Tacoma 
Railway  & Power  Company,  being  all  of  the  stock  of  such  com- 
pany. 

$264,000  par  value  out  of  the  total  issue  of  $1,500,000  par 
value  of  the  bonds  of  the  Tacoma  Railway  & Power  Company. 

$2,382,687.27  promissory  notes  of  the  Tacoma  Railway  & 
Power  Company. 

$250,000  par  value  of  the  preferred  stock  of  the  Pacific  Trac- 
tion Company,  being  the  full  amount  of  such  stock  issued. 

$1,250,000  par  value  of  the  common  stock  of  the  Pacific 
Traction  Company,  being  the  full  amount  of  such  stock  issued. 

Said  company  also  owns  the  lighting  system  used  for  fur- 
nishing electric  light  to  the  towns  and  inhabitants  of  Kent, 
Auburn,  Milton,  and  other  towns  along  its  line  and  the  sawmill 
and  timber  lands  at  Milton,  and  $447,638.64  in  cash  and  cur- 
rent assets. 

Finding  No.  5. 

That  in  order  to  reproduce  the  lines  owned  and  operated  by 
the  Puget  Sound  Electric  Railway,  not  including  the  said  East 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


43 


P street  line,  and  the  old  Puyallup  line,  it  would  be  necessary 
to  clear  133  acres,  which  clearing,  for  the  purpose  of  ascer- 
taining the  cost  of  reproduction,  is  estimated  to  cost  $60.00 
per  acre. 

It  would  be  necessary  to  grub  580  stations,  which  grubbing, 
for  the  purpose  of  ascertaining  the  cost  of  reproduction,  is  esti- 
mated to  cost '$15.00  per  station. 

It  would  be  necessary  to  cut  200  trees  growing  off  the  right- 
of-way  dangerous  to  operation,  which  tree-cutting,  for  the  pur- 
pose of  estimating  the  cost  of  reproduction,  is  estimated  to  cost 
$2.00  per  tree. 

That  it  would  be  necessary  to  move  610,000  cubic  yards  of 
common  excavation  a distance  of  not  to  exceed  300  feet,  which 
is  estimated  to  cost  25  cents  per  yard;  150,000  cubic  yards  of 
hardpan  or  cemented  gravel  a distance  of  not  to  exceed  300 
feet,  which  is  estimated  to  cost  45  cents  per  cubic  yard;  1,150 
cubic  yards  of  solid  rock  a distance  of  not  to  exceed  300  feet, 
which  is  estimated  to  cost  $1.10  per  cubic  yard,  and  of  the 
above  quantities  it  would  be  necessary  to  move  an  equivalent 
of  700,000  cubic  yards  a distance  of  100  feet  in  excess  of  said 
300-foot  free  haul  allowance,  which  is  estimated  to  cost  1 cent 
per  cubic  yard.  Of  the  above  excavation  it  would  be  necessary 
to  transport  47,500  cubic  yards  for  filling  an  average  distance 
of  15  miles,  which  is  estimated  to  cost  9%  cents  per  cubic  yard. 

It  would  be  necessary  to  dig  ditches  and  drains  at  an  esti- 
mated cost  of  $2,000.00. 

It  would  be  necessary  to  ballast  46.35  miles  of  track  with 
gravel,  which  is  estimated  to  cost  $1,100.00  per  mile. 

It  would  be  necessary  to  furnish  and  lay  ties  as  follows: 
157,877  ties  6"x8"x8',  16,446  ties  6"x8"x9',  which  are  esti- 
mated to  cost  delivered  in  the  material  yard  35  cents  per  tie 
for  the  former  and  40  cents  per  tie  for  the  latter. 

It  would  be  necessary  to  lay  5,292.8  tons  of  30-foot  steel 
rails  and  1,409.1  tons  of  60-foot  steel  rails,  which  are  esti- 
mated to  cost  delivered  in  the  material  yard  $39.50  per  ton 
for  the  30-foot  rails  and  $41.50  per  ton  for  the  60-foot  rails. 

The  laying  of  the  rails  would  necessitate  the  furnishing  and 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


44 


use  of  14,584  Weber  joints  complete,  1,327  American  continu- 
ous joints  complete,  106,596  pounds  of  angle  bars,  25,240 
pounds  of  fish  plates,  10,304  pounds  of  track  bolts  %"x3%", 
2,574  pounds  track  bolts  %"x2 369,989  pounds  of  spikes 
9-16//x5%//,  2,000  rail  braces,  3,010  lineal  feet  of  guard  rails, 
which  track  fastenings  are  estimated  to  cost  $53,592. 

That  it  would  be  necessary  to  place  66  seventy-pound  spring 
frogs,  22  seventy-pound  rigid  frogs,  22  sixty-pound  rigid  frogs, 
16  fifty-pound  rigid  frogs,  13  forty-pound  rigid  frogs,  72 
seventy-pound  split  switches  complete,  12  sixty -pound  split 
switches  complete,  1 fifty-pound  split  switch  complete,  and  6 
forty-pound  split  switches  complete ; 8 sets  of  head  chairs,  8 
sets  of  tie  rods,  59  high  stands,  2 low  stands,  30  ground  throws, 
139  pairs  of  guard  rails,  47  loose-tongue  switches  complete,  3 
derails,  59  switch  lamps,  61  switch  locks,  5 sixty-pound  crossing 
frogs  complete,  which  for  the  purpose  of  estimating  the  cost 
of  reproduction  are  estimated  to  cost  $16,201.00. 

That  it  would  be  necessary  to  lay  plank  paving  necessitating 
1,136,630  feet  B.  M.,  and  to  use  590  yards  of  crushed  rock  in 
paving,  which  paving  it  is  estimated  would  cost  $19,826.00. 

That  in  order  to  reproduce  the  said  line  it  would  be  necessary 
to  lay  63.75  miles  of  track  and  to  surface  56.70  miles  of  track, 
which  track-laying  and  surfacing  is  estimated  to  cost  $44,- 
625.00,  and  to  place  139  frogs  and  switches,  the  placing  of 
which  is  estimated  to  cost  $25.00  each,  and  to  place  5 crossing 
frogs,  the  placing  of  which  is  estimated  to  cost  $25.00  each. 

That  in  order  to  reproduce  the  line  it  would  be  necessary  to 
drive  one  tunnel  180  feet  long  and  to  line  such  tunnel  with  tim- 
ber, which  for  the  purpose  of  estimating  the  cost  of  reproduc- 
tion, is  estimated  to  cost  $65.00  per  lineal  foot. 

That  in  order  to  reproduce  the  said  line  it  would  be  necessary 
to  construct  the  following  bridges,  trestles  and  culverts : 

One  210-foot  bow  spring  steel  truss,  with  cylinder  piers, 
which  is  estimated  to  cost  $21,000. 

One  72-foot  deck  girder,  with  pile  abutments,  which  is  esti- 
mated to  cost  $3,600.00. 

One  60-foot  steel  I-beam,  which  is  estimated  to  cost  $1,800.00. 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


45 


One  combination  bridge,  two  110-foot  spans  with  cylinder 
piers,  which  is  estimated  to  cost  $12,100.00. 

One  150-foot  combination  bridge,  with  pile  abutments,  which 
is  estimated  to  cost  $6,750.00. 

One  150-foot  combination  bridge,  with  cylinder  piers,  which 
is  estimated  to  cost  $7,050.00. 

One  200-foot  Howe  truss  drawbridge,  with  pile  crib,  which 
is  estimated  to  cost  $13,000.00. 

One  190-foot  Howe  truss  drawbridge,  with  pile  crib,  which  is 
estimated  to  cost  $12,350.00. 

One  100-foot  pony  Howe  truss  bridge,  with  pile  abutments, 
which  is  estimated  to  cost  $3,000.00. 

One  80-foot  pony  Howe  truss  bridge,  with  pile  abutments, 
which  is  estimated  to  cost  $2,000.00. 

One  87-foot  pony  Howe  truss  bridge,  which  is  estimated  to 
cost  $2,349.00. 

One  60-foot  pony  Howe  truss  bridge,  which  is  estimated  to 
cost  $1,200.00. 

361,612  lineal  feet  of  piles  in  place,  which  are  estimated  to 
cost  25  cents  per  lineal  foot. 

39,256  lineal  feet  of  piles  cut  off,  which  are  estimated  to  cost 
10  cents  per  lineal  foot. 

4,889,386  feet  B.  M.  of  timber  in  trestles,  which  are  esti- 
mated to  cost  in  place  $28.00  per  thousand. 

166,451  pounds  of  wrought  iron  in  trestles,  which  is  esti- 
mated to  cost  31/2  cents  per  pound. 

121,515  pounds  of  cast  iron  in  trestles,  which  is  estimated 
to  cost  3%  cents  per  pound. 

150  lineal  feet  of  12-inch  vitrified  pipe,  which  is  estimated 
to  cost  in  place  $1.00  per  lineal  foot. 

272  lineal  feet  of  14-inch  vitrified  pipe,  which  is  estimated 
to  cost  $1.25  per  lineal  foot  in  place. 

659  lineal  feet  of  15-inch  vitrified  pipe,  which  is  estimated  to 
cost  in  place  $1.35  per  lineal  foot. 

802  lineal  feet  of  16-inch  vitrified  pipe,  which  is  estimated  to 
cost  in  place  $1.50  per  lineal  foot. 


46 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


1,364  lineal  feet  of  18-inch  vitrified  pipe,  which  is  estimated 
to  cost  in  place  $1.75  per  lineal  foot. 

42  lineal  feet  of  24-inch  vitrified  pipe,  which  is  estimated  to 
cost  in  place  $2.90  per  lineal  foot. 

That  there  is  8,382  feet  B.  M.  of  timber  in  wooden  boxes, 
which  is  estimated  to  cost  $25.00  per  thousand  in  place. 

That  there  are  8,283  lineal  feet  of  logs  in  culverts,  which  are 
estimated  to  cost  12  cents  per  lineal  foot. 

That  it  would  be  necessary  to  erect  and  construct  pile  and 
timber  bulkhead  to  protect  the  bank  of  Black  river,  which  is 
estimated  to  cost  $4,857.00. 

That  it  would  be  necessary  to  construct  a timber  and  rock- 
fill  wing  dam  at  the  Puyallup  river  bridge,  which  is  estimated  to 
cost  $4,000.00. 

That  it  would  be  necessary  to  place  2,000  cubic  yards  of 
riprap,  which  is  estimated  to  cost  $1.25  per  cubic  yard. 

That  in  order  to  reproduce  the  crossings,  fences,  cattle- 
guards  and  signs,  it  would  be  necessary  to  use  82,615  feet  B.  M. 
of  timber  in  crossings,  which  is  estimated  to  cost  in  place  $20.00 
per  thousand. 

That  it  would  be  necessary  to  use  146,233  feet  B.  M.  of 
timber  in  inclines  to  grade  crossings,  which  is  estimated  to  cost 
$27.00  per  thousand. 

That  it  would  be  necessary  to  use  1,074  pounds  of  wrought 
iron  in  such  inclines,  which  is  estimated  to  cost  3%  cents  per 
pound,  and  210  pounds  of  cast  iron  in  the  said  inclines,  which 
is  estimated  to  cost  3^/2  cents  per  pound. 

That  it  would  be  necessary  to  use  30  kegs  of  wire  spikes, 
which  are  estimated  to  cost  $3.00  per  keg. 

That  it  would  be  necessary  to  use  9,650  feet  B.  M.  of  tim- 
ber in  farm  crossing  inclines,  which  is  estimated  to  cost  $25.00 
per  thousand. 

3 kegs  of  wire  spikes  in  such  farm  crossing  inclines,  which  are 
estimated  to  cost  $3.00  per  keg. 

That  it  would  be  necessary  to  construct  54  miles  of  standard 
board  fence,  estimated  to  cost  $450.00  per  mile. 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


47 


8 miles  of  combination  woven  and  barbed  wire  fence,  estimated 
to  cost  $800.00  per  mile. 

1,960  feet  of  tight  board  fence  along  the  Bay  street  yard 
in  Tacoma,  which  is  estimated  to  cost  56  cents  per  lineal  foot. 

It  would  be  necessary  to  construct  150  board  gates,  estimated 
to  cost  $8.00  per  gate. 

82  “Trackmans”  cattle-guards,  which  are  estimated  to  cost 
$25.00  each. 

207  “Bartlett”  cattle-guards,  estimated  to  cost  $20.00  each. 

It  will  be  necessary  to  erect  18  danger  signs  and  196  warn- 
ing signs,  which  are  estimated  to  cost  $2.00  each. 

28  railroad  crossing  signs,  estimated  to  cost  $5.00  each. 

8 station  signs,  estimated  to  cost  $10.00  each. 

85  electric  rail  signs,  estimated  to  cost  $8.00  each. 

28  “Stop,  Look,  Listen”  signs,  estimated  to  cost  $1.00  each. 

4 yard  limit  signs,  estimated  to  cost  $4.00  each. 

8 city  limit  signs,  81  whistle  posts  and  19  S.  posts,  which 
are  estimated  to  cost  $1.00  each. 

That  in  order  to  reproduce  said  line  it  would  be  necessary  to 
install  88  platform  stop  signals,  which  are  estimated  to  cost 
$8.00  each. 

8 train  order  signals,  which  are  estimated  to  cost  $20.00  each. 

2 block  light  sets,  which  are  estimated  to  cost  $275.00  each. 

That  in  order  to  reproduce  the  telegraph  and  telephone  lines 
along  its  line  it  would  be  necessary  to  erect  58  forty-five  foot 
cedar  poles,  which  are  estimated  to  cost  $4.50  each. 

66  forty-foot  cedar  poles,  which  are  estimated  to  cost  $8.80 
each. 

To  place  1,675  four-pin  cross-arms,  with  hardware,  estimated 
to  cost  80  cents  each. 

816  six-pin  cross-arms,  with  hardware,  estimated  to  cost 
$1.00  each. 

To  string  15,812  pounds  of  No.  10  hard-drawn  copper  tele- 
phone wire,  which  is  estimated  to  cost  18  cents  a pound. 

18,800  pounds  of  No.  9 bare  iron  telegraph  wire,  estimated 
to  cost  6 cents  per  pound. 


48 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


1,750  pounds  of  No.  10  weather-proof  iron  telegraph  wire, 
which  is  estimated  to  cost  7 cents  per  pound. 

It  would  be  necessary  to  place  5,886  double  petticoat  insu- 
lators, with  pins,  which  are  estimated  to  cost  7 cents  each. 

To  install  11  telegraph  keys,  which  are  estimated  to  cost 
$1.05  each. 

10  telegraph  sounders,  which  are  estimated  to  cost  $5.25 
each. 

14  relays,  which  are  estimated  to  cost  $4.20  each. 

6 box  relays,  which  are  estimated  to  cost  $4.25  each. 

12  cutouts,  estimated  to  cost  $1.25  each. 

To  install  a telephone  switchboard  at  Kent,  which  is  esti- 
mated to  cost  $300.00. 

And  that  the  labor  necessary  to  erect,  construct  and  install 
the  said  telegraph  and  telephone  lines,  including  placing  the 
cross-arms,  would  cost  $2,500.00. 

That  in  order  to  reproduce  said  line  it  would  be  necessary  to 
erect  poles  and  fixtures  as  follows : 

1,544  fifty-foot  cedar  transmission  poles,  which  are  estimated 
to  cost  $5.50  each. 

28  seventy-five  foot  cedar  transmission  poles,  which  are  esti- 
mated to  cost  $11.25  each. 

603  thirty-foot  trolley  poles,  estimated  to  cost  $2.55  each. 

324  forty-foot  trolley  poles,  which  are  estimated  to  cost  $3.80 
each. 

1,635  transmission  cross-arms,  2-pin,  with  hardware,  which 
are  estimated  to  cost  70  cents  each. 

1,572  feeder  cross-arms,  4-pin,  with  hardware,  which  are  esti- 
mated to  cost  80  cents  each. 

316  feeder  cross-arms,  6-pin,  with  hardware,  estimated  to 
cost  $1.00  each. 

57  galvanized  guy  wire  clamps,  3 bolt,  7-16"  strand,  which 
are  estimated  to  cost  12  cents  each. 

14  line  anchor  clamps,  Mai.  Galv.,  which  are  estimated  to 
cost  50  cents  each. 

82  anchor  rods,  which  are  estimated  to  cost  50  cents  each. 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


49 


And  the  necessary  labor  to  place  such  poles  and  fixtures, 
which  is  estimated  would  cost  the  sum  of  $14,979.00. 

That  in  order  to  erect  and  construct  the  transmission  system 
it  would  be  necessary  to  string  25,050  pounds  of  1-0  bare 
copper  transmission  line  wire,  which  is  estimated  to  cost  18 
cents  per  pound. 

6,516  pounds  of  No.  1 bare  copper  transmission  line  wire, 
which  is  estimated  to  cost  18  cents  per  pound. 

54,534  pounds  of  bare  copper  transmission  No.  4 line  wire, 
which  is  estimated  to  cost  18  cents  a pound. 

3,425  insulator  pins,  which  are  estimated  to  cost  40  cents 
each. 

1,607  pole  brackets,  which  are  estimated  to  cost  40  cents 
each. 

5,025  insulators,  which  are  estimated  to  cost  $1.50  each. 

And  miscellaneous  material  connected  with  the  installation, 
which  is  estimated  to  cost  $500.00. 

And  it  is  estimated  that  the  labor  necessary  to  install  such 
transmission  system  would  cost  $4,000.00. 

That  to  reproduce  the  said  line  it  would  be  necessary  to  con- 
struct a distributing  system,  consisting  of  the  following  items: 

72  cut-out  switches,  500  amperes  Q.  B.,  which  are  estimated 
to  cost  $9.00  each. 

66,598  pounds  third  rail  crossing  cables,  W.  P.  500  MCM, 
which  is  estimated  to  cost  18  cents  per  pound. 

2,353  pounds  of  third  rail  crossing  cable,  500  MCM,  which 
is  estimated  to  cost  18  cents  per  pound. 

763  pounds  third  rail  feed  taps,  W.  P.  500  MCM,  which  are 
estimated  to  cost  18  cents  per  pound. 

371  pounds  of  third  rail  feed  taps,  300  MCM,  which  are  esti- 
mated to  cost  18  cents  per  pound. 

300  pounds  third  rail  feed  taps,  W.  P.  100  MCM,  which  are 
estimated  to  cost  18  cents  per  pound. 

74,470  pounds  overhead  feeders,  bare,  500  MCM,  which  are 
estimated  to  cost  18  cents  per  pound. 


50 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


137,529  pounds  overhead  feeders,  bare,  300  MCM,  which  are 
estimated  to  cost  18  cents  per  pound. 

9,119  pounds  overhead  feeders,  W.  P.  500  MCM,  which  are 
estimated  to  cost  18  cents  per  pound. 

4,187  overhead  grounds,  W.  P.  500  MCM,  which  are  esti- 
mated to  cost  18  cents  per  pound. 

900  pounds  overhead  grounds,  W.  P.  300  MCM,  which  are 
estimated  to  cost  18  cents  per  pound. 

613  pounds  cross-bars,  frogs  and  switch- jumpers,  W.  P.  500 
MCM,  which  are  estimated  to  cost  18  cents  per  pound. 

1,142  pounds  cross-bars,  frogs  and  switch- jumpers,  W.  P. 
300  MCM,  which  are  estimated  to  cost  18  cents  per  pound. 

335  pounds  cross-bars,  frogs  and  switch- jumpers,  W.  P.  4-0, 
which  are  estimated  to  cost  18  cents  per  pound. 

16,900  running  rail  bonds,  main  line,  which  are  estimated  to 
cost  50  cents  each. 

I, 200  running  rail  bonds,  212  B.  B.,  which  are  estimated  to 
cost  44  cents  each. 

304  running  rail  bonds,  “A”  4-0,  which  are  estimated  to 
cost  37  cents  each. 

6,745  third  rail  bonds,  which  are  estimated  to  cost  $1.28 
each. 

16,263  third  rail  insulators,  which  are  estimated  to  cost  88 
cents  each. 

2,935  tons  third  rail,  30  feet,  100-pound,  which  are  estimated 
to  cost  $39.50  per  ton. 

252  third  rail  noses,  which  are  estimated  to  cost  $2.00  each. 

504  nose  fish-plates,  which  are  estimated  to  cost  70  cents  each. 

12,800  third  rail  fish-plates,  which  are  estimated  to  cost  24 
cents  each. 

32,000  pounds  third  rail  bolts,  which  are  estimated  to  cost 
3 cents  per  pound. 

55,432  pounds  trolley  wire,  4-0,  which  is  estimated  to  cost 
18  cents  per  pound. 

II, 290  pounds  trolley  wire,  2-0,  which  is  estimated  to  cost  18 
cents  per  pound. 


PUGET  SOUND  ELECTRIC  RY  — FINDINGS 


51 


4,880  pounds  trolley  wire,  1-0,  which  is  estimated  to  cost  18 
cents  per  pound. 

38.000  feet  Siemens-Martens  steel  cable,  7-16",  which  is  esti- 
mated to  cost  3.15  cents  per  foot. 

2.000  feet  Siemens-Martens  steel  cable,  %",  which  is  esti- 
mated to  cost  2.7  cents  per  foot. 

3.000  feet  Siemens-Martens  steel  cable,  which  is  esti- 

mated to  cost  2.5  cents  per  foot. 

16.000  feet  signal  strand,  %",  which  is  estimated  to  cost 
83  cents  per  foot. 

32,650  feet  signal  strand,  5-16",  which  is  estimated  to  cost 
1.1  cents  per  foot. 

1.000  feet  signal  strand,  %",  which  is  estimated  to  cost  1.3 
cents  per  foot. 

1,639  eyebolts,  which  are  estimated  to  cost  12  cents  each. 

1,542  G.  E.  wood  strain  insulators,  which  are  estimated  to 
cost  23  cents  each. 

80  home-made  wood  strain  insulators,  which  are  estimated  to 
cost  25  cents  each. 

240  single  curve  hangers,  which  are  estimated  to  cost  51 
cents  each. 

180  double  curve  hangers,  which  are  estimated  to  cost  57 
cents  each. 

588  straight  line  hangers,  which  are  estimated  to  cost  51 
cents  each. 

1,888  cable  insulators,  with  pins,  which  are  estimated  to  cost 
23  cents  each. 

659  ears,  2-0,  which  are  estimated  to  cost  30  cents  each. 

165  ears,  single  O,  which  are  estimated  to  cost  25  cents  each. 

171  ears,  4-0,  which  are  estimated  to  cost  35  cents  each. 

35  trolley  frogs,  which  are  estimated  to  cost  $3.50  each. 

339  T-bar  pole  brackets,  which  are  estimated  to  cost  $2.50 
each. 

16  Richmond  flexible  pole  brackets,  which  are  estimated  to 
cost  $2.50  each. 

53  steady  bar  bracket  attachments  complete,  which  are  esti- 
mated to  cost  $3.40  each. 


52 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


3,997  messenger  clips,  %"  Mai.  Galv.,  which  are  estimated 
to  cost  6 cents  each. 

3,956  Detroit  “Form  2”  clamps,  4-0  %/r  Mai.  Galv.,  which 
are  estimated  to  cost  10  cents  each. 

46  Detroit  “Form  5”  clamps,  4-0  %"  Mai.  Galv.,  which  are 
estimated  to  cost  20  cents  each. 

46  strain  collars,  which  are  estimated  to  cost  3.8  cents 
each. 

645  steel  hanger  rods,  Galv.  %//xl31/2//,  which  are  estimated 
to  cost  3 cents  each. 

18  steel  hanger  rods,  Galv.  %"xl3^'/,  Fig.  A (120-foot 
span),  which  are  estimated  to  cost  7.5  cents  each. 

645  hangers,  Galv.  %//x4//  Fig.  A (120-foot  span),  which 
are  estimated  to  cost  3.2  cents  each. 

616  hangers,  Galv.  %//x51/2//  Fig.  A (120-foot  span),  which 
are  estimated  to  cost  3.8  cents  each. 

645  hangers,  Galv.  %//x7%//  Fig.  A (120-foot  span),  which 
are  estimated  to  cost  4.5  cents  each. 

645  hangers,  Galv.  %//x9%//  Fig.  A (120-foot  span),  which 
are  estimated  to  cost  5.3  cents  each. 

645,‘ hangers,  Galv.  %"xl2%//  Fig.  A (120-foot  span),  which 
are  estimated  to  cost  6.6  cents  each. 

29  hangers,  Galv.  %//x5%'/  Fig.  B (120-foot  span),  which 
are  estimated  to  cost  4.7  cents  each. 

31  hangers,  Galv.  %//x7%//  Fig.  B (100-foot  span),  which 
are  estimated  to  cost  5.3  cents  each. 

16  hangers,  Galv.  %'/x8%'/  Fig.  B (100-foot  span),  which 
are  estimated  to  cost  5.9  cents  each. 

16  hangers,  Galv.  %"xl01/2//  Fig.  B (100-foot  span),  which 
are  estimated  to  cost  6.5  cents  each. 

16  hangers,  Galv.  %//xl3%'/  Fig.  B (100-foot  span),  which 
are  estimated  to  cost  7.5  cents  each. 

18  hangers,  Galv.  %//xll%'/  Fig.  B (60-foot  span),  which 
are  estimated  to  cost  7 cents  each. 

18  hangers,  Galv.  %//xl2%//  Fig.  B (60-foot  span),  which 
are  estimated  to  cost  7.3  cents  each. 


PUGET  SOUND  ELECTRIC  RY—  FINDINGS 


53 


92  wood  brake  strain  insulators,  1%"  Dia.  14"  Ins.,  which 
are  estimated  to  cost  18  cents  each. 

18  Crosby  clips,  %",  which  are  estimated  to  cost  8 cents  each. 

57  Crosby  clips,  7-16",  which  are  estimated  to  cost  9 cents 
each. 

15  trolley  wire  connections,  brass  2"x%"  4-0  Grvd.,  which 
are  estimated  to  cost  $1.10  each. 

339  messenger  insulators,  porcelain  10,000  V.  1%"  pin  hole, 
which  &re  estimated  to  cost  15  cents  each. 

4 overhead  switches,  which  are  estimated  to  cost  $12.50  each. 

100,165  feet  B.  M.  of  timber  in  cable  boxes,  which  is  estimated 
to  cost  $10.00  per  thousand. 

Miscellaneous  material,  which  is  estimated  to  cost  $500.00. 

And  for  the  labor  necessary  for  the  installation  of  the  distri- 
bution system,  it  is  estimated  $25,000.00. 

That  in  order  to  reproduce  the  sub-station  buildings  it 
would  be  necessary  to  erect  a brick  sub-station  at  Kent,  con- 
taining 122,708  cubic  feet,  which  is  estimated  to  cost  12% 
cents  per  cubic  foot. 

A frame  battery  room,  with  special  floor  containing  28,940 
cubic  feet,  which  is  estimated  to  cost  10  cents  per  cubic  foot. 

A brick  sub-station  at  Milton,  containing  87,030  cubic  feet, 
which  is  estimated  to  cost  12 % cents  per  cubic  foot. 

A frame  battery  room  at  Milton,  with  special  floor  contain- 
ing 28,940  cubic  feet,  which  is  estimated  to  cost  10  cents  per 
cubic  foot. 

And  a brick  sub-station  at  Puyallup,  containing  84,820  cubic 
feet,  which  is  estimated  to  cost  12%  cents  per  cubic  foot. 

That  in  order  to  reproduce  the  line,  it  would  be  necessary  to 
erect  shops  and  car  houses  as  follows : 

Corrugated  iron  car  shed,  containing  8,568  square  feet  floor 
area,  which  is  estimated  to  cost  45  cents  per  square  foot. 

Frame  car  sheds,  containing  19,248  square  feet  floor  area, 
which  is  estimated  to  cost  50  cents  per  square  foot. 

And  it  would  be  necessary  to  install  two  sets  of  track  scales, 
which  are  estimated  to  cost  $1,300.00  per  set. 


54 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


That  to  reproduce  the  stations,  waiting-rooms  and  miscel- 
laneous buildings,  it  would  be  necessary  to  construct: 

A brick  and  frame  passenger  station  at  Tacoma,  which  is 
estimated  to  cost  $4,000.00. 

A two-story  frame  station  building  at  Kent,  containing 
28,050  square  feet  floor  area,  which  is  estimated  to  cost  $2.00 
per  square  foot. 

Frame  station  buildings,  bungalow  type,  containing  5,728 
square  feet  floor  area,  which  is  estimated  to  cost  $1.25  per 
square  foot. 

Old  standard  frame  station  buildings,  containing  8,318 
square  feet  floor  area,  which  is  estimated  to  cost  $1.00  per 
square  foot. 

108  square  feet  floor  area  of  open  sheds,  which  is  estimated 
to  cost  50  cents  per  square  foot. 

2,396  square  feet  floor  area  of  frame  freight  sheds,  which  are 
estimated  to  cost  90  cents  per  square  foot. 

5,374  square  feet  floor  area  of  freight  sheds,  corrugated 
iron,  which  is  estimated  to  cost  $1.20  per  square  foot. 

1,060  square  feet  floor  area  of  miscellaneous  frame  sheds, 
which  are  estimated  to  cost  50  cents  per  square  foot. 

478  square  feet  floor  area  of  miscellaneous  corrugated  iron 
sheds,  which  are  estimated  to  cost  50  cents  per  square  foot. 

216  square  feet  floor  area  of  telephone  shacks,  which  are 
estimated  to  cost  50  cents  per  square  foot. 

306  square  feet  floor  area  of  tool  sheds,  which  are  estimated 
to  cost  50  cents  per  square  foot. 

372  square  feet  floor  area  of  section-houses,  which  are  esti- 
mated to  cost  50  cents  per  square  foot. 

64,111  square  feet  of  low  passenger  platform,  which  is  esti- 
mated to  cost  10  cents  per  square  foot. 

5,875  square  feet  of  high  passenger  platform,  which  is  esti- 
mated to  cost  15  cents  per  square  foot. 

4,562  square  feet  of  freight  platforms,  which  is  estimated 
to  cost  15  cents  per  square  foot. 

3,909  square  feet  of  milk  platforms,  which  are  estimated  to 
cost  20  cents  per  square  foot. 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


55 


8 water  closets,  which  are  estimated  to  cost  $50.00  each. 

That  in  order  to  reproduce  the  line  it  would  be  necessary  to 
install  certain  sub-station  equipment  as  follows: 

3 three-pole,  50, 000-volt  lightning  arresters,  with  insulators, 
which  are  estimated  to  cost  $621.00  each. 

5 type  H,  50,000-volt  oil  switches,  which  are  estimated  to 
cost  $1,600.00  each. 

212  Thomas  insulators,  50,000-volt,  which  are  estimated  to 
cost  $1.85  each. 

36  disconnecting  switches,  50,000-volt,  which  are  estimated 
to  cost  $41.50  each. 

494  pounds  1-0  bare  copper  wire,  which  is  estimated  to  cost 
18  cents  per  pound. 

7 oil-cooled  transformers,  200  KW,  which  are  estimated  to 
cost  $2,300.00  each. 

4 oil-cooled  transformers,  180  KW,  which  are  estimated  to 
cost  $1,000.00  each. 

4 current  transformers,  50,000-volt,  which  are  estimated  to 
cost  $150.00  each. 

3 induction  motor  generator  sets,  300  KW,  with  non-auto- 
matic double  pole  oil  switches,  2,300  volts  and  600-volt,  genera- 
tor panels  (1  slate,  2 marble),  which  are  estimated  to  cost 
$8,500.00  each. 

2 automatic  oil  switches,  4-pole  St.  300-ampere,  with  slate 
slabs,  and  2 current  transformers,  which  are  estimated  to  cost 
$140  each. 

3 H.  E.  Ind.  voltmeters,  with  potential  transformers,  which 
are  estimated  to  cost  $85.00  each. 

6 railway  feeder  panels,  marble,  which  are  estimated  to  cost 
$200.00  each. 

1 lighting  panel,  16-inch  marble,  which  is  estimated  to  cost 

$100.00. 

1 lighting  panel,  24-inch  marble,  which  is  estimated  to  cost 
$300.00. 

2 C.  R.  regulators,  which  are  estimated  to  cost  $315.00  each. 

2 booster  transformers,  3 KW,  which  are  estimated  to  cost 

$47.50  each. 


56 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


2 booster  transformers,  5 KW,  which  are  estimated  to  cost 
$66.50  each. 

1 Polyphase  recording  wattmeter,  300  amperes,  and  2 200- 
watt  potential  transformers  and  2 current  transformers,  300-5 
amperes,  which  are  estimated  to  cost  $200.00. 

1 T.  R.  wattmeter,  800  amperes,  600-volt,  which  is  estimated 
to  cost  $175.00. 

1 induction  motor  panel,  2,300  volts,  which  is  estimated  to 
cost  $290.00. 

40  feet  lead  covered  insulated  cable,  500  MCM,  which  is 
estimated  to  cost  91  cents  per  foot. 

400  feet  lead  covered  insulated  cable  No.  2,  which  is  esti- 
mated to  cost  90  cents  per  foot. 

80  feet  lead  covered  insulated  cable  No.  4,  which  is  estimated 
to  cost  30  cents  per  foot. 

147  feet  weather-proof  cable,  800  MCM,  which  is  estimated 
to  cost  60  cents  per  foot. 

509  feet  weather-insulated  cable,  500  MCM,  which  is  esti- 
mated to  cost  45  cents  per  foot. 

26  feet  rubber  covered  cable,  500  MCM,  which  is  estimated 
to  cost  65  cents  per  foot. 

540  feet  rubber  covered  cable  No.  2,  which  is  estimated  to 
cost  8 cents  per  foot. 

2 50,000-volt,  150  to  50  current  transformers,  which  are 
estimated  to  cost  $300.00  each. 

1 motor  panel,  24-inch  marble,  2,300-volt,  with  automatic 
oil  switch,  300  ampere,  4-pole  St.,  which  is  estimated  to  cost 
$290.00. 

1 T.  R.  wattmeter,  polyphase  300-ampere,  with  2-300  to  5 
current  transformers,  which  are  estimated  to  cost  $200.00. 

1 T.  R.  wattmeter,  800  amperes,  600-volt,  which  is  estimated 
to  cost  $175.00. 

5 oil  switches,  3-pole,  30,000  volts,  which  are  estimated  to 
cost  $400.00  each. 

9 disconnecting  switches,  30,000  volts,  which  are  estimated 
to  cost  $20.00  each. 


PUGET  SOUND  ELECTRIC  RY.— FINDINGS 


57 


30  Westinghouse  air  brake  jacks  and  slabs,  which  are  esti- 
mated to  cost  $8.00  each. 

30  marble  barriers  for  same,  which  are  estimated  to  cost 
$30.00  each. 

3 lightning  arresters,  3-pole,  30, 000-volt,  which  are  estimated 
to  cost  $100.00  each. 

3 generator  panels,  slate,  16-inch,  which  are  estimated  to  cost 
$200.00  each. 

3 slate  slabs  and  switch  handles,  which  are  estimated  to  cost 
$20.00  each. 

6 feeder  panels,  16-inch  slate,  which  are  estimated  to  cost 
$50.00  each. 

1 slate  slab,  with  synchronizer,  which  is  estimated  to  cost 
$55.00. 

2 front  connected  feeder  switches,  600  amperes,  which  are 
estimated  to  cost  $20.00  each. 

10  current  transformers,  30,000-volt,  which  are  estimated  to 
cost  $125.00  each. 

8 potential  transformers,  which  are  estimated  to  cost  $150.00 
each. 

1 compensator  for  180  KW  transformer,  17%  KW,  which 
is  estimated  to  cost  $275.00. 

318  pounds  1-0  bare  copper  wire,  which  is  estimated  to  cost 
18  cents  per  pound. 

Miscellaneous  equipment  transformer  and  generator  rooms, 
which  are  estimated  to  cost  $500.00. 

3 air  compressors  and  receiving  tanks,  with  4-horse-power 
motors,  which  are  estimated  to  cost  $300.00  each. 

Labor  of  installing  transformers  and  generators  in  three  sub- 
stations is  estimated  to  cost  $3,400.00. 

3 storage  battery  sets,  consisting  of  288  cells  chloride  ac- 
cumulators, 15  plates  per  cell ; 288  cells  chloride  accumulators, 
17  plates  per  cell ; 288  cells  chloride  accumulators,  17  negative 
plates  per  cell;  428  feet  lead  covered  rubber  insulated  cable, 
1,000  MCM,  3 booster  sets,  35  KW,  6 marble  battery  panels, 
including  all  additional  apparatus  necessary  to  3 complete  stor- 
age battery  equipments,  with  exception  of  positive  plates  miss- 


58 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


ing  from  one  battery,  including  freight  and*  installation,  which 
are  estimated  to  cost  $106,149.00. 

That  in  order  to  reproduce  the  shop  equipment,  it  would  be 
necessary  to  install: 

1  sharper,  20-inch,  which  is  estimated  to  cost  $250.00. 

1 radial  drill,  24-inch,  which  is  estimated  to  cost  $150.00. 

1 metal  lathe,  20-inch  by  12-inch,  which  is  estimated  to  cost 
$570.00. 

And  miscellaneous  hand  tools,  which  are  estimated  to  cost 
$30.00. 

That  in  order  to  reproduce  the  water  stations,  it  will  be 
necessary  to  install  2 box  tanks,  6/x7/xl6/,  which  are  estimated 
to  cost  $100.00  each. 

Pumping  plant  and  miscellaneous  pipe,  which  is  estimated  to 
cost  $200.00. 

To  reproduce  the  roadway  tools  and  surveying  instruments, 
it  is  estimated  that  same  will  cost  $1,500.00. 

That  to  reproduce  the  cars  and  equipment  in  use  by  said  com- 
pany, it  would  be  necessary  to  procure: 

9 combination  baggage  and  coaches,  which  are  estimated  to 
cost  $55,860.00. 

5 passenger  coaches,  which  are  estimated  to  cost  $20,530.00. 

4 motor  trailers,  which  are  estimated  to  cost  $21,000,00. 

11  trailers,  which  are  estimated  to  cost  $55,280.00. 

4 observation  cars,  which  are  estimated  to  cost  $41,160.00.  • 

4 racetrack  cars,  which  are  estimated  to  cost  $10,500.00. 

22  box  cars,  which  are  estimated  to  cost  $16,050.00. 

25  hopper  cars,  which  are  estimated  to  cost  $16,875.00. 

14  gondolas,  which  are  estimated  to  cost  $9,350.00. 

97  flat  cars,  which  are  estimated  to  cost  $54,126.00. 

2 freight  motors,  box  type,  which  are  estimated  to  cost 

$6,000.00. 

3 freight  motors,  cab  type,  which  are  estimated  to  cost 
$7,500.00. 

1 steam  shovel,  which  is  estimated  to  cost  $10,000.00. 

1 derrick  car,  which  is  estimated  to  cost  $1,200.00. 

1 piledriver,  which  is  estimated  to  cost  $1,500.00. 


PUGET  SOUND  ELECTRIC  RY. — FINDINGS 


59 


That  the  defendant  company  purchased  3 locomotives,  which 
had  been  in  use  at  the  time  of  the  purchase;  that  while  said 
locomotives  would  cost  new  the  sum  of  $24,000.00,  it  would  cost 
to  replace  the  locomotives  second-hand,  as  the  same  were  pur- 
chased, the  sum  of  $7,500.00. 

That  to  reproduce  said  line,  it  would  be  necessary  to  procure 
electric  equipment  of  cars  as  follows : 

8 General  Electric  No.  66  4-motor  equipments  complete, 
which  are  estimated  to  cost  the  sum  of  $60,600.00. 

4 General  Electric  No.  66  2-motor  equipments  complete, 
which  are  estimated  to  cost  the  sum  of  $16,000.00. 

2 General  Electric  No.  205  4-motor  equipments  complete, 
which  are  estimated  to  cost  the  sum  of  $14,000.00. 

4 General  Electric  No.  90  4-motor  equipments  complete, 
which  are  estimated  to  cost  $12,800.00. 

4 Westinghouse  Electric  No.  49  equipments  complete,  which 
are  estimated  to  cost  $4,800.00. 

5 General  Electric  No.  66  freight  motor  equipments  com- 
plete, which  are  estimated  to  cost  $37,500.00. 

That  the  said  company  purchased  second-hand  a Packard 
Standard  touring  car ; that  had  the  same  been  purchased  new 
it  would  have  cost  the  sum  of  $4,750.00,  but  that  the  said  com- 
pany paid  and  it  is  estimated  that  to  reproduce  the  same  in 
the  form  in  which  it  was  purchased  would  cost  $2,000.00. 

Finding  No.  6. 

That  after  a road  is  originally  constructed,  and  after  the 
same  is  turned  over  to  the  operating  department,  improvements 
are  constantly  made  in  the  roadbed  by  section  men  and  by  the 
operating  department,  the  expenditure  for  which  is  necessarily 
charged  to  operation ; that  for  a number  of  years  the  roadbed 
undergoes  what  is  known  as  seasoning,  and  as  said  roadbed  is 
so  seasoned  and  improved  by  proper  maintenance  it  is  appre- 
ciated in  value  approximately  10  per  cent,  of  its  value  at  the 
time  of  its  being  turned  over  to  the  operating  department  as 
aforesaid ; 

That  the  ballast  on  a roadbed  is  affected  by  elements  and 


60 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


traffic,  and  depreciates,  so  that  the  present  value  of  the  ballast 
is  approximately  85  per  cent,  of  its  value  new ; 

That  the  ties  have  depreciated  so  that  their  present  value 
is  but  30  per  cent,  of  their  value  new ; 

That  the  rails,  fastenings  and  joints  have  depreciated  so  that 
their  present  value  is  85  per  cent,  of  their  value  new ; 

That  the  frogs  and  switches  depreciate  so  that  their  present 
value  is  80  per  cent,  of  their  value  new; 

That  the  paving  has  depreciated  so  that  the  present  Value  is 
50  per  cent,  of  its  value  new; 

That  the  money  expended  in  track-laying  and  surfacing  de- 
preciates in  proportion  to  the  track  materials,  and  that,  taking 
into  consideration  the  depreciation  of  the  moneys  expended  in 
track-laying  and  surfacing,  the  present  value  is  70  per  cent,  of 
its  value  new; 

That  the  lining  of  the  tunnel  on  said  line  has  depreciated,  no 
other  portion  of  the  tunnel  having  depreciated,  and  that  the 
present  value  of  the  tunnel  is  95  per  cent,  of  its  value  new; 

That  on  said  line  is  a large  amount  of  track,  to-wit,  approxi- 
mately seven  miles,  built  on  pile  trestles,  and  in  addition  thereto 
are  numerous  bridges  and  culverts;  that  the  bridges,  trestles 
and  culverts  on  said  line  have  depreciated  so  that  their  present 
value  is  but  52  per  cent,  of  their  value  new ; 

That  the  crossings,  fences,  cattle-guards  and  signs  have  de- 
preciated until  the  present  value  is  54  per  cent,  of  their  value 
new ; 

That  the  interlocking  and  signal  apparatus  have  depreciated 
until  their  present  value  is  65  per  cent,  of  their  value  new; 

That  the  telegraph  and  telephone  system  and  lines  have  de- 
preciated until  their  present  value  is  70  per  cent,  of  their  value 
new ; 

That  the  poles  and  fixtures  have  depreciated  until  their  pre- 
sent value  is  57  per  cent,  of  their  value  new; 

That  the  transmission  system,  being  made  up  largely  of 
copper  wire  and  insulators,  does  not  depreciate  materially  and 
its  present  value  is  approximately  100  per  cent,  of  its  value 
new; 


PUGET  SOUND  ELECTRIC  RY  — FINDINGS 


61 


That  the  present  value  of  the  distribution  system  is  ap- 
proximately 93  per  cent,  of  its  value  new; 

That  the  present  value  of  the  sub-station  buildings  is  approxi- 
mately 90  per  cent,  of  their  value  new  ; 

That  the  present  value  of  the  shops  and  car  houses  is  ap- 
proximately 80  per  cent,  of  their  value  new ; 

That  the  present  value  of  the  stations,  waiting-rooms  and 
miscellaneous  buildings  is  approximately  81  per  cent,  of  their 
value  new; 

That  the  sub-station  equipment  has  depreciated  until  its 
present  value  is  approximately  73  per  cent,  of  its  value  new; 

That  the  present  value  of  the  shop  equipment  is  50  per  cent, 
of  its  value  new; 

That  the  present  value  of  the  water  stations  is  approxi- 
mately 40  per  cent,  of  their  value  new ; 

That  the  present  value  of  the  roadway  tools  is  approxi- 
mately 50  per  cent,  of  their  value  new ; 

That  the  present  value  of  the  car  bodies  and  trucks  is  ap- 
proximately 65  per  cent,  of  their  value  new; 

That  the  present  depreciated  value  of  the  locomotives  below 
their  second-hand  value  when  purchased  is  96  per  cent,  of  such 
purchase  price; 

That  the  present  value  of  the  electrical  equipment  of  cars  is 
approximately  65  per  cent,  of  its  value  new; 

That  the  present  value  of  the  miscellaneous  equipment,  con- 
sisting of  the  Packard  standard  touring  car,  the  same  being 
purchased  second-hand,  is  approximately  84  per  cent  of  its 
purchase  price. 

Finding  No.  7. 

That,  in  the  conduct  of  a railroad  business,  it  is  necessary 
to  have  constantly  on  hand  supplies  and  material  and  also 
necessary  to  have  on  hand  cash  in  order  to  properly  and  eco- 
nomically carry  on  the  conduct  of  such  road ; that  the  report  of 
the  defendant  company  to  the  Railroad  Commission  for  the 
fiscal  year  ending  June  30,  1908,  shows  cash  on  hand  amounting 
to  $90,277.32,  and  material  and  supplies  on  hand  of  $207,463.- 


62 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


25,  making  a total  of  cash  and  supplies  of  $297,740.57 ; that 
for  the  fiscal  year  ending  June  30,  1909,  the  report  of  said 
road  to  the  Commission  shows  cash  on  hand  $103,367.04,  and 
material  and  supplies  on  hand  $171,256.81,  making  a total  of 
cash  and  supplies  in  the  sum  of  $274,623.85 ; that  $300,000  is 
a reasonable  sum  to  allow  as  working  capital  to  cover  cash 
working  capital  and  to  furnish  necessary  material  and  supplies. 

Finding  No.  8. 

That  it  would  cost  to  reproduce  new  the  property  owned  and 
used  by  said  railroad  for  railroad  purposes,  and  consisting  of 
the  line  of  road  between  Seattle  and  Tacoma,  the  Renton  branch, 
the  Tideflat  branch,  and  the  Orting  branch,  including  all  equip- 
ment, transmission  system,  distribution  system,  buildings,  right- 
of-way,  land  and  terminal  grounds,  and  miscellaneous  stores  and 
cash  on  hand,  the  sum  of  $4,157,558. 

Finding  No.  9. 

That  the  present  depreciated  value  of  said  property,  based 
solely  on  the  cost  of  reproducing  the  same  new,  is  the  sum  of 
$3,598,232.00 ; that  the  cost  of  reproducing  the  several  ele- 
ments and  the  depreciated  value  referred  to  in  the  foregoing 
findings  is  as  follows : 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


63 


COST  OF  REPRODUCTION  AND  DEPRECIATION  VALUE, 
PUGET  SOUND  ELECTRIC  RAILWAY. 

(June  30,  1909.) 


No. 

ACCOUNT. 

Cost 
of  repro- 

Pet. to- 
tal depre- 

Cost of  repro- 
duction less 

duction. 

ciation. 

depreciation. 

1. 

Construction. 

Right-of-way  and  real  estate 

$917,773 

000 

$917,773 

2. 

Engineering  and  superintendence 

53,336 

000 

53,336 

3. 

Fiscal  and  physical  supervision  and  man- 
agement   

186,955 

000 

186,955 

4. 

Grading  

251,857 

000 

275,135* 

5. 

Ballast  

50,985 

15 

43,337 

6. 

Ties  | 

61,865 

70 

18,559 

7. 

Rails,  fastenings  and  joints 

321,136 

15 

272,966 

8. 

Frogs  and  switches 

16,201 

20 

12,961 

9. 

Paving  

19,826 

50 

9,913 

10. 

Track-laying  and  surfacing 

48,225 

30 

33,758 

11. 

Tunnels  

11,700 

5 

11,115 

12. 

Bridges,  trestles  and  culverts 

344,553 

48 

179,168 

13. 

Crossings,  fences,  cattle-guards  and  signs 

41,508 

46 

22,414 

14. 

Interlocking  and  signal  apparatus 

914 

35 

594 

15. 

Telegraph  and  telephone  lines 

9,196 

30 

6,437 

16. 

Poles  and  fixtures 

29,328 

43 

16,717 

17. 

Transmission  system  

29,548 

000 

29,548 

18. 

Distribution  system  

253,065 

7 

235,350 

19. 

Sub-station  buildings  

42,607 

10 

38,346 

20. 

Shop  and  car  houses 

16,080 

20 

12,864 

21. 

Stations,  waiting-rooms  and  miscellane- 
ous buildings  

44,211 

19 

35,811 

22. 

Sub-station  equipment 

182,159 

27 

132,976 

23. 

Shop  equipment  

1,000 

50 

500 

24. 

Water  stations  

400 

60 

160 

25. 

Engineering  instruments  and  roadway 
tools 

1,500 

50 

750 

26. 

Legal  and  general  expense 

17,779 

000 

17,779 

27. 

Interest  during  construction 

145,181 

000 

145,181 

28. 

Contingencies  

96,266 

000 

96,266 

29. 

Stores  and  working  capital 

300,000 

000 

300,000 

30. 

Totals 

Equipment. 

Cars  

$3,495,154 

$326,931 

35 

$3,106,669 

$212,505 

31. 

Locomotives  

7,500 

4 

7,200 

32. 

Electric  equipment  of  cars 

145,700 

35 

94,705 

33. 

Miscellaneous  equipment 

2,000 

16 

1,680 

34. 

Totals 

Total  Equipment. 

Total  construction  and  equipment 

Lighting  system  

$482,131 

$3,977,285 

30,000 

16 

$316,090 

$3,422,759 

25,200 

35. 

Total  construction,  equipment,  and  light- 
ing system  

Brokerage  fees  

$4,007,285 

150,273 

00 

$3,447,959 

150,273 

Grand  total 

$4,157,558 

$3,598,232 

* Covers  appreciation  of  roadbed. 


64 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Finding  No.  10. 

That  the  unit  prices  hereinbefore  set  out  as  the  cost  of  re- 
production of  the  units  of  material  ordinarily  handled  by  con- 
tract include  the  contractors’  profit  or  are  the  unit  prices  for 
which  contracts  could  be  let  covering  the  handling  and  furnish- 
ing of  such  units. 

Finding  No.  11. 

That  it  would  cost  in  cash  at  the  present  time  to  reproduce 
the  right-of-way,  lands  and  terminal  grounds  of  such  rail- 
road owned  and  used  by  it  for  railroad  purposes,  and  such  as 
it  now  owns  which  in  the  immediate  future  will  be  necessary  for 
it  to  use  for  railroad  purposes,  the  sum  of  $917,773.00. 

Finding  No.  12. 

That  in  the  construction  of  an  electric  line  of  road  it  is 
necessary  to  have  a careful  supervision  by  competent  electrical 
engineers  as  distinguished  from  the  services  of  construction 
engineers  over  all  parts  of  construction  until  its  completion ; 
that  Stone  & Webster  engineering  corporation  in  the  con- 
struction of  the  line  exercised  supervision  and  acted  as  purchas- 
ing agents  for  electrical  and  other  supplies,  and,  in  order  to 
reproduce  the  property  economically,  it  would  be  necessary  to 
employ  engineers  of  like  experience  and  standing  to  supervise 
such  work,  and  7.5  per  cent,  of  the  amount  expended  on  items 
numbered  2,  4 to  26  inclusive  and  30  to  34  inclusive,  mentioned 
in  finding  No.  9,  would  be  a reasonable  compensation  to  cover 
such  services. 

Finding  No.  13. 

That  a reasonable  and  fair  allowance  for  engineering  and 
superintendence  by  constructing  engineers  is  3 per  cent,  of  the 
cost  of  reproducing  the  grading,  tunnels,  bridges,  trestles  and 
culverts,  ties,  rails,  track  fastenings,  frogs  and  switches,  track- 
laying and  surfacing,  fences,  crossings,  cattle-guards  and  signs, 
interlocking  and  signal  apparatus,  telegraph  and  telephone 
lines,  poles  and  fixtures,  transmission  system,  distribution  sys- 
tem, substation  buildings,  shops,  car-houses,  stations,  waiting- 


PUGET  SOUND  ELECTRIC  RY.— FINDINGS 


65 


rooms,  miscellaneous  buildings,  substation  equipment,  shop 
equipment,  water  stations,  roadway  tools  and  section  equipment. 

Finding  No.  14. 

That  a reasonable  and  fair  allowance  for  legal  and  general 
expenses  would  be  1 per  cent,  of  the  items  mentioned  in  connec- 
tion with  the  engineering  expenses,  together  with  1 per  cent,  on 
the  amount  paid  for  taxes  during  construction. 

Finding  No.  15. 

That  a reasonable  and  fair  allowance  for  interest  during 
construction  would  be  3%  per  cent,  of  the  items  last  mentioned 
plus  the  amount  necessary  for  legal  and  general  expenses, 
engineering  and  superintendence  and  7%  Per  cent,  on  the  cost 
of  reproduction  of  the  right-of-way. 

Finding  No.  16. 

That  at  least  25  per  cent,  of  the  cost  of  a railroad  should  be 
procured  from  a source  other  than  mortgage  bonds.  That  if 
such  sum  is  so  procured,  bonds  can  be  floated  on  properties  as 
attractive  as  the  defendant’s  line  for  the  remaining  75  per  cent, 
at  par,  less  the  cost  and  expense  attendant  upon  a full  inves- 
tigation of  the  properties,  a report  thereon  by  a reliable  finan- 
cial firm  and  a brokerage  commission  in  interesting  capital 
therein.  That  5 per  cent,  of  the  amount  of  such  bonds  is  a 
reasonable  and  ample  sum  to  cover  such  expenses. 

Finding  No.  17. 

That  in  estimating  the  cost  of  a piece  of  work  to  be  thereafter 
performed  it  is  customary  and  proper  for  engineers  to  add  to 
the  total  estimate  made  up  of  the  units  of  labor  and  material 
a sum  approximating  10  per  cent,  to  cover  exigencies  and 
contingencies.  That  after  a work  has  been  constructed  many  of 
the  exigencies  and  contingencies  have  been  met  and  will  be 
covered  by  the  changed  and  increased  units  actually  encoun- 
tered, and  in  estimating  the  cost  of  reproduction  such  increase 
and  changed  units  will  be  provided  for.  Labor  conditions,  how- 
—5 


66 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


ever,  must  be  provided  for,  and  other  exigencies  will  arise,  and 
to  cover  such  conditions  the  Commission  estimates  that  5 per 
cent,  of  the  cost  of  reproducing  the  property,  excluding  equip- 
ment, real  estate,  interest  on  real  estate  during  construction, 
working  capital  and  brokerage,  should  be  added  to  cover  such 
contingencies. 

Finding  No.  18. 

That,  while  the  property  of  a railroad  is  constantly  growing 
older  and  different  units  are  depreciating,  and  renewals  and  re- 
placements will  require  a greater  expenditure  with  different 
years,  still,  if  the  property  be  properly  maintained  and  proper 
provision  be  made  for  renewals  and  replacements,  the  actual 
market  value  of  such  road  should  not  and  will  not  fluctuate  by 
reason  of  the  depreciation  of  the  different  units  being  greater  or 
less  in  different  years. 

Finding  No.  19. 

That  the  city  of  Seattle  has  a present  population  exceeding 

275.000  people;  the  city  of  Tacoma  a population  exceeding 

100.00  people;  Puyallup,  7,000;  Kent,  3,500;  Auburn,  1,500; 
Renton,  1,300;  Georgetown,  7,000;  Meadows,  500;  Quarry, 
Duwamish  and  Allentown,  between  500  and  600 ; Riverton,  be- 
tween 400  and  450  ; Foster,  900 ; Tukwila,  between  500  and  600  ; 
Earlington,  500  ; Algona,  630  ; Pacific  City,  800  ; Milton,  600 ; 
and  along  the  said  line  there  are  numerous  small  villages,  and, 
excluding  Renton  and  Puyallup,  which  are  situate  upon  the 
branch  lines,  the  territory  between  Seattle  and  Tacoma  contains 
a population  tributary  to  this  road  of  approximately  15,000 
people ; 

That  in  the  year  1900,  when  the  construction  of  said  line  was 
contemplated  and  decided  upon,  the  official  census  taken  by  the 
United  States  government  showed  the  following  population 
tributary  to  the  line,  to-wit:  Georgetown,  243;  Kent,  755; 
Auburn,  489 ; Puyallup,  884 ; Renton,  412 ; Seattle,  80,671 ; 
Tacoma,  37,714 ; the  remaining  towns  and  villages  at  that  time 
having  no  existence  sufficient  to  justify  their  being  mentioned 
in  the  census  report ; 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


67 


That  the  valley  so  traversed  is  highly  rich  in  its  agricul- 
tural possibilities,  and  particularly  in  its  adaptability  to  the 
raising  of  small  fruits,  from  two  to  three  acres  being  sufficient 
to  support  a family;  that  the  growth  of  the  cities  of  Seattle 
and  Tacoma,  with  the  rapid  development  of  the  towns  and 
valleys  traversed,  is  such  as  adds  great  value  to  the  line  of  the 
defendant  company ; that  the  road  largely  traverses  the  center 
of  the  different  valleys,  and  it  is  unlikely  that  another  electric 
line  will  in  the  near  future  attempt  to  parallel  this  line;  that 
the  fact  that  the  defendant  company  owns  the  capital  stock  of 
the  Tacoma  Railway  & Power  Company’s  line,  thus  giving  it  an 
entry  into  the  business  center  of  the  city  of  Tacoma,  adds 
great  value  to  the  line,  independent  of  the  fact  of  its  paying 
reasonable  trackage  tolls  therefor;  and  its  alliance  with  the 
Seattle  Electric  lines,  by  which  it  is  able  to  secure  reasonable 
traffic  arrangements  with  said  lines,  enabling  it  to  enter  the 
business  portion  of  the  city  of  Seattle,  adds  value  to  its  line. 

Finding  No.  20. 

That  the  gross  earnings  of  the  road  since  it  began  operating 
have  been  as  follows,  for  the  year  ending  June  30: 


1903  $354,990  67 

1904  430,732  84 

1905  450,632  32 

1906  574,962  06 

1907  708,548  78 

1908  721,542  85 


— and  for  the  year  1909,  calculated  on  the  same  basis  with 
reference  to  terminal  trackage  rights,  the  gross  earnings  were 

$755,552.17. 

Finding  No.  21. 

That  the  cost  in  cash  of  the  Puget  Sound  Electric  Railway 
down  to  the  31st  day  of  March,  1903,  the  date  the  property 
was  formally  taken  over  by  the  defendant  company,  was  ap- 
proximately the  sum  of  $1,961,914.02;  that  the  earnings  from 
operation  for  the  twelve  months  ending  December  31st,  1903, 
was  the  sum  of  $101,119.30,  being  5.15  per  cent,  on  the  cost; 
that  the  betterments  and  additions  expended  during  the  year 


68 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


1903  cost  the  sum  of  $377,191.18,  and  the  net  earnings  from 
operation  for  the  calendar  year  ending  December  31,  1901, 
amounted  to  the  sum  of  $122,719.09,  being  5.25  per  cent,  on  the 
total  amount  expended ; that  the  betterments  and  additions  ex- 
pended during  the  calendar  year  ending  December  31,  1901, 
amounted  to  $151,018.17,  and  the  net  earnings  from  operation 
for  the  year  1905  were  $128,955.77,  being  5.18  per  cent,  on  the 
total  amount  invested;  that  the  betterments  and  additions  ex- 
pended during  the  year  1905  was  the  sum  of  $167,976.75,  and 
the  net  earnings  from  operation  for  the  year  1906  were  $207,- 
021.21,  being  7.79  per  cent,  on  the  total  invested;  that  the 
betterments  and  additions  expended  during  the  year  1906  was 
the  sum  of  $216,552.32,  and  the  net  earnings  from  operation 
for  the  year  1907  was  the  sum  of  $285,052.79,  being  9.92  per 
cent,  on  the  total  amount  invested ; that  the  amount  expended  for 
betterments  and  additions  for  the  year  1907  was  the  sum  of 
$382,379.85,  and  the  net  earnings  from  operation  for  the  year 
1908  was  the  sum  of  $217,562.82,  being  7.60  per  cent,  on  the 
total  investment ; that  the  amount  expended  for  betterments  and 
additions  for  the  year  1908  was  the  sum  of  $161,171.11,  and 
the  net  earnings  from  operation  for  the  year  1909  was  the  sum 
of  $213,190.16,  being  5.71  per  cent,  on  the  total  amount  in- 
vested. 

Finding  No.  22. 

That  included  in  the  operating  expenses  for  the  years  men- 
tioned in  finding  No.  13  is  current  maintenance  and  replace- 
ment of  way,  structures  and  equipment,  cost  of  conducting 
transportation,  general  and  miscellaneous  expenses,  and  taxes ; 
but  the  same  does  not  include  any  allowance  for  depreciation 
other  than  that  expended,  and  that  a fair  allowance  for  depre- 
ciation in  addition  to  the  amounts  so  expended  for  replacement 
and  charged  to  operating  expenses  during  said  years  would  be 
a sum  approximating  $500,000 ; that,  assuming  the  volume  of 
business  to  be  transacted  in  the  future  would  be  approximately 
equal  to  that  transacted  for  the  years  1908  and  1909,  there 
should  be  set  aside  to  cover  current  maintenance  and  replace- 
ment of  way,  structures  and  equipment,  damages  from  floods, 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


69 


fire  and  other  causes,  and  exigencies,  a sum  approximating 
$162,136.94  from  operating  revenue,  which  sum  should  be 
charged  to  operating  expenses ; that  for  the  calendar  year 
1908  there  was  charged  to  operating  expenses,  to  cover  such 
items,  as  shown  by  the  testimony  of  G.  E.  Tripp,  the  sum  of 
$91,125.15;  and  for  the  calendar  year  1909  there  was  charged 
to  operating  expenses  to  cover  such  items  $102,125.21,  leaving 
an  apparent  deficit  of  $60,011.73. 


Finding  No.  23. 


That  the  liabilities  of 

the  Puget 

Sound  Electric  Railway 

consist  of  the  following, 
as  follows : 

with  a par 

and  market 

value  thereon 

Item. 

Par  Value. 

Market  Value. 

Common  stock  

...  $3,500,000 

$875,000 

Preferred  stock  

500,000 

425,000 

Bonds  

. . . 4,133,000 

3,926,350 

Convertible  notes  

. . . 1,500,000 

1,500,000 

Notes  payable  

615,000 

615,000 

Note  for  old  Puyallup  line. 

150,000 

150,000 

Totals 

. . .$10,398,000 

$7,491,350 

That  the  property  owned  by  said  company  and  not  used  by 


it  in  connection  with  the  railroad  lines  operated  by  it  consists  of 


the  following,  with  a par  and  market  value  thereon  as  follows, 
to-wit : 

Item.  Par  Value.  Market  Value. 


Tacoma  Railway  & Power  Company  bonds $264,000  00 

Tacoma  Railway  & Power  Company  stocks 2,000,000  00 

Tacoma  Railway  & Power  Company  notes 2,382,687  27 

Pacific  Traction  stock,  common  and  preferred. . . 1,500,000  00 

Timber  lands  106,514  90 

P Street  line 11,000  00 

Old  Puyallup  line 150,000  00 


$211,200  00 

500.000  00 
2,382,687  27 

149,086  50 

100.000  00 
11,000  00 

150,000  00 


— making  a total  market  value  of  $3,503,973.77,  leaving  a 
market  value  for  the  lines  operated  by  the  defendant  company, 
as  reflected  by  the  amount  and  market  value  of  its  stocks, 
bonds  and  other  liabilities  constituting  its  capitalization,  of 
$3,987,376.23. 


Finding  No.  24. 

That  on  the  said  main  line,  extending  from  Seattle  to  Ta- 
coma and  consisting  of  43.12  miles  of  main  and  second  track, 


70 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


there  are  sixty-five  curves  with  an  aggregate  length  of  curved 
line  amounting  to  7.30  miles ; that  there  are  35.82  miles  of 
straight  track;  that  there  are  16.70  miles  of  level  track;  that 
there  are  28  ascending  grades,  making  an  aggregate  ascent 
of  356.39  feet ; said  ascending  grades  have  an  aggregate  length 
of  13.85  miles ; that  there  are  28  descending  grades,  making 
an  aggregate  descent  of  409.46  feet  and  an  aggregate  length 
of  descending  grades  of  12.57  miles ; 

That  on  the  Renton  branch,  consisting  of  2.96  miles  of  single 
main  track,  there  are  fifteen  curves  with  an  aggregate  length 
of  curved  line  amounting  to  0.97  miles;  that  there  is  1.99  miles 
of  straight  track;  that  there  is  1.85  miles  of  level  track;  that 
there  are  two  ascending  grades,  making  an  aggregate  ascent 
of  26.3  feet,  said  ascending  grades  having  an  aggregate  length 
of  0.51  miles  ; that  there  is  a descending  grade  making  an 
aggregate  descent  of  32.0  feet  and  an  aggregate  length  of 
descending  grades  of  0.60  miles ; 

That  on  the  Tideflats  line,  consisting  of  0.58  miles  of  single 
main  track,  there  are  5 curves,  with  an  aggregate  length  of 
curved  line  amounting  to  0.30  miles ; that  there  are  0.28  miles 
of  straight  track ; that  there  are  3.49  miles  of  level  track’;  that 
there  are  two  ascending  grades,  making  an  aggregate  ascent  of 
16  feet,  said  ascending  grades  having  an  aggregate  length  of 
0.15  miles ; that  there  is  a descending  grade  making  an  aggre- 
gate descent  of  28.50  feet  and  an  aggregate  length  of  descend- 
ing grades  of  0.12  miles 

That  on  the  Orting  branch,  consisting  of  6.94  miles  of  single 
main  track,  there  are  19  curves,  with  an  aggregate  length  of 
curved  line  amounting  to  0.80  miles ; that  there  are  6.14  miles 
of  straight  track ; that  there  are  3.94  miles  of  level  track ; that 
there  are  7 ascending  grades,  making  an  aggregate  ascent  of 
74.27  feet,  said  ascending  grades  having  an  aggregate  length 
of  2.93  miles ; that  there  are  2 descending  grades,  making  an 
aggregate  descent  of  46.90  feet  and  an  aggregate  length  of 
descending  grades  of  0.52  miles. 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


71 


Finding  No.  25. 

That  the  operating  revenue  received  by  the  defendant  com- 
pany is  derived  approximately  80  per  cent,  from  its  passenger 
business  and  20  per  cent,  from  its  freight  business. 

Finding  No.  26. 

That  as  shown  by  the  annual  report  of  said  defendant  com- 
pany for  the  year  1909,  the  gross  operating  revenue  derived 
from  passenger  service  was  $516,767.90,  the  gross  revenue 
derived  from  freight  business  was  $131,779.85,  and  earnings 
by  said  road  from  sources  other  than  freight  and  passenger 
amounted  to  the  sum  of  $19,101.91 ; 

That  the  gross  operating  expenses  as  shown  by  said  report 
properly  applicable  to  the  passenger  business  was  the  sum  of 
$316,230.58,  and  the  operating  expenses  properly  applicable 
and  chargeable  to  freight  business  was  the  sum  of  $77,765.30; 

That,  as  before  stated,  no  allowance  was  made  in  such  operat- 
ing expenses  for  depreciation  excepting  such  as  was  actually 
expended  for  renewals. 

Finding  No.  27. 

That  from  a consideration  of  the  foregoing  findings  the  Com- 
mission concludes  that  the  fair  cash  market  value  of  the  lines  of 
railroad  hereinbefore  described  as  being  owned  and  operated 
by  the  defendant  company  on  the  31st  day  of  June,  1909,  was 
the  sum  of  $4,070,237.00. 

Finding  No.  28. 

That  in  order  to  reproduce  the  line  owned  by  the  said  de- 
fendant known  at  the  East  P street  line,  which  line  is  under  lease 
to  the  Tacoma  Railway  & Power  Company,  it  would  be  neces- 
sary to  move  2,000  cubic  yards  of  common  excavation  a distance 
of  approximately  7 miles,  which  is  estimated  to  cost  35  cents 
per  cubic  yard; 

It  would  be  necessary  to  place  3,436  6//x8//x8/  ties,  which  are 
estimated  to  cost  35  cents  each; 

It  would  be  necessary  to  lay  111.3  tons  of  30-foot  steel  rails, 


72 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


which  are  estimated  to  cost  $39.50  per  ton  delivered  in  the 
material  yard; 

That  the  laying  of  the  rails  would  necessitate  the  furnishing 
and  use  of  track  fastenings  as  follows:  14,004  pounds  of  angle 
bars,  790  pounds  of  fish  plates,  1,434  pounds  of  track  bolts  and 
7,265  pounds  of  spikes,  said  track  fastenings  being  estimated  to 
cost  $641.00 ; 

It  would  be  necessary  to  place  one  complete  turnout,  which  is 
estimated  to  cost  $130.00 ; 

That  it  would  be  necessary  to  lay  and  surface  1.21  miles  of 
track,  which  is  estimated  to  cost  $700.00  per  mile,  and  to  place 
one  turnout,  the  labor  necessary  for  the  placing  of  which 
costing  $25.00 ; 

It  would  be  necessary  to  erect  75  thirty-foot  trolley  poles, 
costing  $2.55  each;  to  place  25  four-pin  feeder  cross  arms, 
with  hardware,  estimated  to  cost  80  cents  each,  the  labor  en- 
gaged in  erecting  said  poles  and  fixtures  being  estimated  to 
cost  $337.50 ; 

That  the  distribution  system  in  use  upon  said  East  P.  street 
line  consists  of  3,345  pounds  of  300  MCM  weather-proof  feeder, 
estimated  to  cost  18  cents  per  pound; 

1,830  pounds  of  single  O hard-drawn  trolley  wire,  estimated 
to  cost  18  cents  per  pound; 

25  pins  and  insulators,  estimated  to  cost  6^  cents  each; 

76  No.  1 ears,  estimated  to  cost  27  cents  each; 

61  straight-line  hangers,  estimated  to  cost  51  cents  each; 

15  single-curve  hangers,  estimated  to  cost  57  cents  each; 

123  strain  insulators,  estimated  to  cost  23  cents  each; 

123  eye  bolts,  estimated  to  cost  12  cents  each ; 

4,000  lineal  feet  of  ^-inch  signal  strand,  estimated  to  cost 
83  cents  per  hundred  feet ; 

216  4-0  track  bonds  No.  A,  estimated  to  cost  37  cents  each ; 

46  4-0  track  bonds  No.  BB,  estimated  to  cost  40  cents  each; 

246  pounds  switch  jumpers,  estimated  to  cost  18  cents  per 
pound ; 

The  labor  engaged  in  installing  such  distribution  system, 
estimated  to  cost  $277.00; 


PUGET  SOUND  ELECTRIC  RY—  FINDINGS 


73 


That  the  legal  and  general  expense  involved  in  the  construc- 
tion of  said  East  P street  line  is  estimated  to  cost  $100.00; 

That  the  interest  during  construction  is  estimated  to  amount 
to  $103.00; 

That  an  allowance  for  engineering  should  be  made  amounting 
to  the  sum  of  $200.00 ; 

And  that  there  should  be  added  to  the  above  items  approxi- 
mately $520.00  to  cover  contingencies ; 

That  the  expenses  connected  with  the  financing  said  line 
would  be  5 per  cent,  of  75  per  cent,  of  the  cost  of  reproducing 
the  same  figured  as  above,  amounting  to  the  sum  of  $103.00 ; 

That  the  said  East  P street  line,  as  operated,  is  all  located  in 
the  streets  in  the  city  of  Tacoma;  that  the  defendant  company 
owns  right-of-way  for  an  extension  of  said  line,  which  is  herein- 
before referred  to ; 

That  it  would  cost  to  reproduce  the  said  East  P street  line 
new  the  sum  of  $11,312.00. 

Finding  No.  29. 

That  the  depreciated  value  of  said  East  P street  line,  based 
solely  upon  the  cost  of  reproducing  the  same  new,  is  the  sum  of 
$8,821.00. 

The  cost  of  reproducing  the  same  new  and  the  depreciated 
value  ai^e  as  shown  in  the  following  table,  to-wit : 

COST  OF  REPRODUCTION  AND  DEPRECIATED  VALUE  OF  THE 
EAST  “P”  STREET  LINE. 


(June  30, 

1909.) 

Cost 

Pet.  to- 

Cost of  repro- 

No. 

ACCOUNT. 

of  repro- 

tal depre- 

duction less 

duction. 

ciation. 

depreciation. 

1. 

Engineering  and  superintendence . . . . 

$200 

00 

$200 

2. 

Grading  

00 

770** 

3. 

Ties 

75 

308 

4. 

Rails,  fastenings  and  joints 

20 

4,030 

5. 

Frogs  and  switches 

20 

104 

6. 

Track-laying  and  surfacing 

879 

30 

615 

7. 

Poles  and  fixtures 

40 

329 

8. 

Distribution  system  

10 

1,339 

9. 

Legal  and  general  expense 

100 

00 

100 

10. 

Interest  during  construction 

103 

00 

103 

11. 

Contingencies 

00 

520 

12. 

Brokers’  fees 

00 

403 

Totals 

$8,821 

♦♦Covers  appreciation  of  roadbed. 


74 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Finding  No.  30. 

That  in  order  to  reproduce  the  line  owned  by  the  said  de- 
fendant company  known  as  the  old  Puyallup  line,  extending 
from  Fern  Hill  to  Puyallup,  which  line  is  owned  by  the  defend- 
ant company,  but  is  under  lease  to  the  Tacoma  Railway  & 
Power  Company,  it  would  be  necessary  to  clear  32  acres,  esti- 
mated to  cost  $60.00  per  acre ; 

To  grub  5,000  square  rods,  estimated  to  cost  $1.00  per  square 
rod; 

To  move  60,000  cubic  yards  of  common  excavation  a distance 
of  not  to  exceed  300  feet,  which  is  estimated  to  cost  25  cents 
per  cubic  yard,  and  of  the  above  mentioned  quantities  it  would 
be  necessary  to  move  an  equivalent  of  60,000  yards  100  feet  in 
excess  of  the  free  haul  limit  of  300  feet,  said  overhaul  being 
estimated  to  cost  one  cent  per  cubic  yard ; 

It  would  be  necessary  to  place  8,000  cubic  yards  of  ballast, 
estimated  to  cost  60  cents  per  cubic  yard ; 

To  place  25,934  6//x8//x8/  ties,  estimated  to  cost  35  cents 
each ; 

It  would  be  necessary  to  lay  1,190.43  tons  of  rails,  esti- 
mated to  cost  $39.50  per  ton,  said  rails  requiring  track  fasten- 
ings as  follows : 900  pounds  of  angle  bars,  estimated  to  cost  3 
cents  per  pound;  137,280  pounds  of  fish  plates,  estimated  to 
cost  2 Y2  cents  per  pound;  14,280  pounds  of  track  bolts,  es- 
timated to  cost  3%  cents  per  pound;  83,800  pounds  of  spikes, 
estimated  to  cost  2%  cents  per  pound,  said  track  fastenings 
costing  $5,808.60 ; 

That  it  would  be  necessary  to  install  25  rigid  frogs,  estimated 
to  cost  $25.00  each; 

18  split  switches,  estimated  to  cost  $20.00  each ; 

7 sets  of  head  chairs,  estimated  to  cost  $2.00  each; 

7 sets  of  tie  bars,  estimated  to  cost  $6.00  each; 

13  low  stands,  estimated  to  cost  $18.00  each; 

12  ground  throws,  estimated  to  cost  $10.00  each; 

1 railroad  crossing,  estimated  to  cost  $200.00 ; 

That  it  would  be  necessary  to  pave  with  plank  a portion  of 
the  track  inside  of  the  city  limits  of  Puyallup,  said  paving  re- 


PUGET  SOUND  ELECTRIC  RY—  FINDINGS 


75 


quiring  26,000  feet  B.  M.  of  lumber,  estimated  to  cost  $10.00 
per  thousand;  2,400  feet  B.  M.  of  wood  filler,  estimated  to  cost 
$18.00  per  thousand;  5 kegs  of  wire  spikes,  estimated  to  cost 
$3  per  keg,  and  it  is  estimated  that  the  labor  engaged  in  lay- 
ing same  would  cost  $142.00 ; 

It  would  be  necessary  to  lay  and  surface  9.70  miles  of  main 
track,  estimated  to  cost  $700.00  per  mile,  and  to  lay  5 miles  of 
spurs,  estimated  to  cost  $200.00  per  mile,  and  to  place  26 
frogs  and  switches,  the  placing  of  which  is  estimated  to  cost 
$25.00  each; 

That  to  reproduce  the  bridges,  trestles  and  culverts  on  said 
line  would  require  294,361  feet  B.  M.  of  timber  in  frame  tres- 
tles, estimated  to  cost  $28.00  per  thousand;  8,640  pounds  of 
wrought  iron,  estimated  to  cost  3%  cents  per  pound ; 6,268 
pounds  of  cast  iron,  estimated  to  cost  3%  cents  per  pound ; 
27,220  feet  B.  M.  of  timber  in  wooden  culverts,  estimated  to 
cost  $26.00  per  thousand ; 470  pounds  of  wrought  iron  in  timber 
culverts,  estimated  to  cost  3%  cents  per  pound ; 280  pounds  of 
cast  iron  in  timber  culverts,  estimated  to  cost  3%  cents  per 
pound;  304  lineal  feet  of  logs  in  culverts,  estimated  to  cost  12 
cents  per  lineal  foot;  24  lineal  feet  of  24-inch  vitrified  pipe, 
estimated  to  cost  in  place  $2.90  per  lineal  foot  and  500  lineal 
feet  of  logs  in  cribs,  estimated  to  cost  10  cents  per  lineal  foot; 

That  to  reproduce  the  crossings,  fences,  cattle-guards  and 
signs  along  said  line  would  require  21,800  feet  B.  M.  plank  in 
highway  crossings,  estimated  to  cost  $20.00  per  thousand;  3 
“Stop,  Look,  Listen”  signs,  estimated  to  cost  $5.00  each;  2 
railway  crossing  signs,  estimated  to  cost  $1.00  each;  1 city 
limit  sign,  estimated  to  cost  $2.00  ; 

That  to  reproduce  the  interlocking  and  signal  apparatus 
along  said  line  it  would  be  necessary  to  install  7 block  light 
sets,  estimated  to  cost  $275.00  each,  and  to  string  17  miles  of 
wire,  estimated  to  cost  $37.60  per  mile,  and  the  labor  engaged 
in  stringing  said  wire  is  estimated  to  cost  $291.20; 

That  to  reproduce  the  poles  and  fixtures  along  said  line  it 
would  be  necessary  to  erect  932  thirty-foot  trolley  poles,  es- 
timated to  cost  $2.55  each ; 480  four-pin  cross  arms,  with  hard- 


76 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


ware,  estimated  to  cost  80  cents  each;  1,075  pins  and  insu- 
lators, estimated  to  cost  7 cents  each ; and  the  labor  engaged  in 
erecting  poles  and  fixtures  is  estimated  to  cost  $4,194.00; 

That  to  reproduce  the  distribution  system  along  said  line  it 
would  be  necessary  to  string  68,960  pounds  of  4-0  bare  copper 
feeder,  estimated  to  cost  18  cents  per  pound;  5,495  pounds  of 
300  MCM  weather-proof  copper  feeder,  estimated  to  cost  18 
cents  per  pound;  29,045  pounds  of  single  0 hard-drawn  trolley 
wire,  estimated  to  cost  18  cents  per  pound;  20,000  lineal  feet 
^-inch  signal  strand,  estimated  to  cost  83  cents  per  hundred 
feet;  466  straight-line  hangers,  estimated  to  cost  51  cents  each; 
60  single-curve  hangers,  estimated  to  cost  57  cents  each ; 526 
single  0 ears,  estimated  to  cost  27  cents  each;  500  strain  in- 
sulators and  eye  bolts,  estimated  to  cost  35  cents  each;  3,418 
running  rail  bonds,  estimated  to  cost  30  cents  each,  and  mis- 
cellaneous material  estimated  to  cost  $250.00 ; and  the  labor 
engaged  in  installing  the  distribution  system  is  estimated  to 
cost  $4,684.50 ; 

That  in  order  to  reproduce  the  stations,  waiting-rooms  and 
miscellaneous  buildings  along  said  line  would  require  29,474  feet 
B.  M.  rough  lumber,  estimated  to  cost  $11.00  per  thousand;  8,- 
400  feet  B.  M.  of  dressed  lumber,  estimated  to  cost  $20.00  per 
thousand;  30,000  shingles,  estimated  to  cost  $2.25  per  thou- 
sand ; 290  pounds  of  nails,  estimated  to  cost  3 cents  per  pound ; 
80  gallons  of  paint,  estimated  to  cost  $1.50  per  gallon;  and  the 
labor  engaged  in  erecting  said  stations,  waiting-rooms  and  mis- 
cellaneous buildings  is  estimated  to  cost  $650.00 ; 

That  it  is  estimated  that  the  engineering  and  superintendence 
necessary  to  reconstruct  said  line  would  cost  $4,392.00 ; 

That  the  legal  and  general  expenses  incident  to  the  construc- 
tion of  said  line  would  cost  $1,464.00; 

That  during  the  construction  of  said  line  it  would  be  neces- 
sary to  expend  $3,525.00  for  interest,  which  sum  includes 
interest  upon  right-of-way ; 

That  there  should  be  added  to  the  above  items  approximately 
$7,763.00  to  cover  contingencies ; 

That  in  order  to  reproduce  the  right-of-way  and  real  estate 


PUGET  SOUND  ELECTRIC  RY.— FINDINGS 


77 


along  said  line  it  would  be  necessary  to  expend  the  sum  of 

$12,000.00; 

That  the  expenses  connected  with  the  financing  said  line 
would  be  5 per  cent,  of  75  per  cent,  of  the  cost  of  reproducing 
the  same  above  figured,  amounting  to  the  sum  of  $6,583.00 ; 

That  it  would  cost  to  reproduce  the  said  line  new  the  sum  of 
$182,127.00. 

Finding  No.  31. 

That  the  depreciated  value  of  the  said  old  Puyallup  line,  based 
solely  upon  the  cost  of  reproducing  the  same  new,  is  the  sum 
of  $129,002.00; 

The  cost  of  reproducing  the  same  new  and  the  depreciated 
value  are  shown  in  the  following  table,  to-wit : 

COST  OF  REPRODUCTION  AND  DEPRECIATED  VALUE  OF  THE 
OLD  PUYALLUP  LINE. 

(June  30,  1909.) 


No. 

ACCOUNT. 

Cost 
of  repro- 

Pet. to- 
tal depre- 

Cost of  repro- 
duction less 

1. 

Right-of-way  and  real  estate 

duction. 

$12,000 

ciation. 

00 

depreciation. 

$12,000 

2. 

Engineering  and  superintendence 

4,392 

00 

4,392 

3. 

Grading 

22,520 

00 

24,080* 

4. 

Ballast  

4,800 

25 

3,600 

5. 

Ties  

9,077 

75 

2,244 

6. 

Rails,  fastenings  and  joints 

52,831 

40 

31,699 

7. 

Frogs  and  switches 

1,595 

40 

957 

8. 

Paving  

460 

20 

368 

9. 

Track-laying  and  surfacing 

8,447 

45 

4,646 

10. 

Bridges,  trestles  and  culverts 

9,631 

60 

3,860 

11. 

Crossings,  fences,  cattle-guards  and  signs. 

455 

70 

137 

12. 

Interlocking  and  signal  apparatus 

2,855 

10 

2,570 

13. 

Poles  and  fixtures 

7,027 

90 

703 

14. 

Distribution  system  

25,345 

30 

17,742 

15. 

Stations,  waiting-rooms  and  miscellaneous 
buildings  

1,338 

50 

669 

16. 

Legal  and  general  expense 

1,464 

00 

1,464 

17. 

Interest  during  construction 

3,525 

00 

3,525 

18. 

Contingencies  

7,763 

00 

7,763 

19. 

Brokers’  fees  

6,583 

00 

6,583 

Totals 

$182,127 

$129,002 

♦Covers  appreciation  of  roadbed. 

Witness,  the  Railroad  Commission  of  Washington,  this  26th 
day  of  February,  1910. 

The  Raieroad  Commission  of  Washington, 

By  H.  A.  Fairchild,  Chairman. 

J.  C.  Lawrence,  Commissioner. 
Jesse  S.  Jones,  Commissioner.” 


Attest: 

F.  M.  Larned,  Secretary. 


78 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Finding  No.  2. 


That  practically  since  the  beginning  of  operations  on  said 
road  up  to  and  including  the  16th  day  of  October,  1909,  the 
defendant  company  charged  for  a return  trip  from  Seattle  to 
the  points  named  in  the  first  table  following  the  amounts  men- 
tioned in  the  first  column  thereof ; that  on  the  17th  day  of  Octo- 
ber the  return  trip  rate  was  canceled,  such  return  trip  there- 
after being  twice  the  amount  set  out  in  the  second  column  of 
said  table ; that  the  amount  charged  for  the  return  trip  from 
Tacoma  to  the  points  named  in  the  table  second  following  are 
those  set  out  in  the  first  column  of  said  second  table ; that  on  the 
17th  day  of  October,  1909,  said  return  trip  rates  were  canceled, 
said  return  trip  thereafter  being  twice  the  amount  set  out  in 
the  second  column  of  said  second  table;  that  since  the  said  17th 
day  of  October,  1909,  the  said  rates  have  been  and  are  now  in 
force,  the  only  exception  to  the  return  rates  being  twice  the 
single  fare  is  in  the  fare  charged  between  Seattle  and  Tacoma 
and  Tacoma  and  Seattle,  the  single  fare  in  such  case  being  73 
cents  and  the  return  fare  being  $1.25.  Said  tables  are  as  fol- 
lows, to-wit: 


Spokane  Avenue  $0  10 

Argo  15 

Englewood  15 

Georgetown  15 

Colvins  

McLeans  15 

Gorgiats  15 

Marinos  

Maples  15 

Burts  15 

Mackays  15 

Van  Asselts 15 

Chicago  Avenue  15 

Davis 15 

Meadows 15 

Southside  15 

Floraville  15 

Cardmoores  15 

Duwamish  15 

Quarry 15 

Allentown 


$0  5 
6 

7 

8 
8 
9 

. 9 
9 

10 

10 

10 

10 

11 

12 

13 

13 

14 

14 

15 

16 
17 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


79 


Riverton  

Mortimer 

Foster  

Tukwila ; . 

Black  River 
Renton  Junction 

Earlington  

Renton  

Nelsons  

Orillia  

O’Brien’s 

Kent 

Thomas 

Meredith 

Christopher  .... 

Auburn  

Farrow  

Algona  (Stuck)  . 

Pacific  City  

Bluffs 

Jovita  

Edgewood 

Milton  

Fife  

Cushman 

Willow  Junction 

McAleer  

Ardena  

Firwood  

Cedarhurst 

Berryton  

Puyallup 

Meeker 

Brookville  

Tidehaven  

Waverly 

Tacoma 


15 

15 

15 

15 

25 

25 


25 

35 

35 

45 

50 

60 

70 

70 

75 

85 

85 


85 


95 

1 00 
1 00 


1 00 


1 00 
1 00 


17 

18 

19 

20 
21 
22 
25 
27 
23 
25 
30 
34 

38 

39 

40 
44 

47 

48 

50 

51 

54 

55 
60 
62 

63 

64 

65 
67 
69 
71 

73 

74 
77 

65 

66 
67 
73 


Table  No.  2. 


Waverly  $0  15 

Tidehaven  

Brookville  15 

Meeker 

Puyallup 

Berryton 


Cedarhurst 
Firwood  . . 
Ardena  . . . 
McAleer  . . 


$0  6 

7 

8 

22 

20 

18 

17 

15 

15 

10 


80 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Willow  Junction  

Cushman  

Fife  15 

Milton  15 

Edgewood  25 

Jovita  

Bluffs  35 

Pacific  City  

Algona  (Stuck)  45 

Farrow  45 

Auburn  45 

Christopher  50 

Meredith 50 

Thomas  60 

Kent  60 

O’Brien  70 

Orillia  75 

Nelsons  85 

Renton  95 

Earlington  

Renton  Junction  85 

Black  River 85 

Tukwila  95 

Foster  95 

Mortimer  95 

Riverton  95 

Allentown  

Quarry  95 

Duwamish  95 

Cardmoores  1 00 

Floraville  1 00 

Southside  1 00 

Meadows  1 00 

Davis  1 00 

Chicago  Avenue 1 00 

Van  Asselts  1 00 

Mackays  1 00 

Burts  1 00 

Maples  1 00 

Marinos  

Gorgiats  1 00 

McLeans  1 00 

Colvins  

Georgetown  1 00 

Englewood  1 00 

Argo  1 00 

Spokane  Avenue 1 00 

Seattle  1 00 


9 

10 

11 

13 

18 

19 

22 

23 

25 

26 

29 

33 

34 

35 

39 

44 

48 

50 

56 

54 

51 

52 

53 

54 

55 

56 

56 

57 

58 

59 

59 

60 

60 

61 

62 

63 

63 

63 

63 

64 

64 

64 

65 

65 

66 

67 

69 

73 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


81 


Finding  No.  3. 

That  the  following  points  are  suburban  to  Seattle,  viz., 
Georgetown,  Colvins,  McLeans,  Gorgiats,  Marinos,  Maples, 
Burts,  Mackays,  VanAsselts,  Chicago  Avenue,  Davis,  Meadows, 
Sunnyside,  Floraville,  Cardmoores,  Duwamish,  Quarry,  Allen- 
town, Riverton,  Mortimer,  Foster,  Tukwila,  Black  River  and 
Renton  Junction.  That  practically  90  per  cent,  of  the  heads 
of  families  living  in  said  suburban  towns  gain  their  livelihood  in 
Seattle  as  clerks,  laborers  and  mechanics ; that  the  clerks  travel 
to  and  from  such  points  to  Seattle  practically  six  days  in  the 
week,  laborers  traveling  on  the  average  of  four  round  trips  per 
week;  that  such  heads  of  families  either  own  their  homes  in 
such  suburban  towns  or  are  paying  for  the  same  on  the  install- 
ment plan.  That  they  were  induced  to  purchase  such  homes  by 
reason  of  the  rate  charged  for  the  round  trip  and  its  long  con- 
tinued enforcement.  That  under  the  rates  charged  prior  to 
October  17th,  1909,  the  return  trip  as  far  south  as  Tukwila  be- 
ing not  in  excess  of  15  cents,  or  but  7 cents  in  excess  of  the 
street-car  fare  in  Seattle,  residents,  laborers,  clerks  and  others 
employed  in  Seattle  were  able  by  reason  of  obtaining  cheaper 
homes  at  such  points  then  adjacent  to  street-car  lines  in  Seat- 
tle, to  pay  such  additional  7-cent  car  fare.  That  under  the  in- 
creased rate  to  such  suburban  towns  the  residents,  laborers 
and  clerks  are  unable  from  their  salaries  to  pay  such  increased 
rate,  by  reason  of  its  being  cheaper  to  rent  homes  adjacent  to 
such  street-car  lines  than  occupy  their  homes  and  pay  such 
increased  rates,  and  many  families  and  residents  of  such  places, 
to-wit,  20  from  Quarry,  Duwamish  and  Allentown,  12  from 
Tukwila,  18  from  Foster  and  more  or  less  from  all  towns  men- 
tioned as  suburban,  have  already  abandoned  their  homes  and 
moved  to  points  adjacent  to  street-car  lines  in  Seattle,  and 
many  others  are  contemplating  moving  if  relief  be  not  granted 
in  this  hearing,  all  by  reason  of  such  increased  rates  and  fares. 

That  the  following  points  are  suburban  to  Tacoma:  Waverly, 
Tidehaven,  Brookville,  Meeker,  Puyallup,  Berrytown,  Cedar- 
hurst,  Firwood,  Ardena,  McAleer,  Willow  Junction,  Cushman, 
—6 


82 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


Fife,  Milton,  Edgewood,  Jovita,  Bluffs,  Pacific  City  and  Algona, 
and  a large  part,  of  the  heads  of  families  residents  of  such 
towns  earn  their  livelihood  working  as  clerks,  laborers  and  me- 
chanics in  Tacoma,  and  a similar  condition  exists  as  to  such 
towns  suburban  to  Tacoma  as  that  hereinbefore  set  out  as  to 
the  points  suburban  to  Seattle,  and  many  are  leaving  their 
homes  and  moving  to  Tacoma  for  the  same  reasons  as  above  set 
out. 

Finding  No.  4. 

That  the  town  of  Renton  is  served  by  the  Seattle,  Renton  & 
Southern  Railway,  an  electric  line  extending  from  Seattle  to 
Renton.  That  the  rates  now  and  heretofore  in  force  by  said 
last  named  company  is  the  rate  charged  by  the  defendant  prior 
to  the  17th  day  of  October,  1909,  namely,  15  cents  for  the 
single  trip  and  25  cents  for  the  round  trip.  That  for  the  year 
ending  June  30th,  1909,  the  average  earnings  from  passengers 
going  between  Seattle  and  Renton,  as  indicated  by  the  sales  of 
tickets  at  the  different  ticket  offices,  amounted  to  the  sum  of 
$17,254.10,  or  an  average  of  $1,438.00  per  month;  that  be- 
tween June  30th,  1909,  and  the  16th  day  of  October,  1909,  said 
sales  had  increased  to  an  average  of  $2,708.00  per  month,  and 
between  the  17th  day  of  October,  1909,  and  the  1st  day  of 
January,  1910,  while  the  said  increased  rates  were  in  force, 
said  passenger  earnings  decreased  to  $302.00  per  month,  as 
shown  by  the  sales  at  the  said  ticket  offices.  That  the  return 
fare  being  twice  the  single  fare,  during  said  last  mentioned  time 
a greater  number  of  people  traveling  over  said  line  would  be 
likely  to  pay  cash  fare  to  the  conductor  on  the  train ; such  cash 
fares  not  having  been  segregated  and  accounts  taken  thereof 
other  than  cash  fares  collected  by  the  conductors,  the  Commis- 
sion is  unable  to  state  the  percentage  collected  by  the  conductors 
as  cash  fare,  but  that  between  the  16th  day  of  October,  1909, 
and  the  1st  day  of  January,  1910,  the  earnings  of  the  Seattle, 
Renton  & Southern  Railway  from  passenger  business  between 
Renton  and  Seattle  increased  more  than  150  per  cent. 

That  Earlington  is  situate  between  Renton  Junction  and 
Renton,  and  there  is  in  the  vicinity  of  Earlington  tributary  to 


PUGET  SOUND  ELECTRIC  RY.— FINDINGS 


83 


the  defendant  company’s  lines  approximately  500  people;  that 
a large  number,  to-wit,  90  per  cent.,  of  the  heads  of  families  resi- 
dents of  and  in  the  vicinity  of  Earlington  earn  their  livelihood  in 
Seattle  as  laborers  and  clerks,  and  that  a similar  condition 
exists  as  to  the  residents  of  Earlington  as  has  been  heretofore 
pointed  out  as  to  other  suburban  points.  That  in  addition  to 
the  facts  hereinbefore  set  out,  the  residents  of  Earlington  and 
vicinity,  in  order  to  reach  their  place  of  business  in  Seattle,  walk 
from  the  vicinity  of  the  station  an  additional  mile  and  a half  in 
order  to  obtain  the  cheap  fares  charged  by  the  Seattle,  Renton 
& Southern. 

Finding  No.  5. 

That  the  town  of  Puyallup  was  and  is  served  by  the  defendant 
line  and  by  the  Tacoma  Railway  & Power  Company,  an  allied 
corporation,  such  last  named  line  running  from  Fern  Hill  over 
an  adverse  grade,  traveling  a distance  of  approximately  16 
miles  to  Tacoma,  the  defendant  company’s  line  via  Willow 
Junction  being  9.94  miles  to  Tacoma  and  being  over  a much 
easier  grade  and  through  a more  fertile  and  populous  district 
than  the  Tacoma  Railway  & Power  Company’s  line.  That  in  the 
year  1908,  when  the  defendant  company  was  seeking  a franchise 
from  the  city  of  Puyallup  to  lay  its  lines  in  the  streets  of  Puy- 
allup, the  town,  through  members  of  its  council,  contemplated 
and  suggested  inserting  a provision  in  the  franchise  limiting  the 
rates  thereafter  to  be  charged  between  Puyallup  and  Tacoma  to 
a rate  not  exceeding  the  rates  then  and  theretofore  charged 
over  the  line  of  the  Tacoma  Railway  & Power  Company,  namely, 
15  cents  for  a single  trip  and  25  cents  for  the  round  trip ; that 
at  such  time  the  manager  of  the  defendant  company  objected  to 
the  insertion  of  the  provision,  giving  as  a reason  therefor  that 
it  would  be  an  obstacle  to  the  floating  of  the  securities,  and  at 
such  time  indirectly  promised  that  should  such  franchise  be 
granted  the  rates  in  the  future  would  not  exceed  the  rates 
charged  by  the  Tacoma  Railway  & Power  Company  as  before 
stated,  and  by  reason  thereof  and  relying  thereon,  the  provi- 
sion was  waived  by  the  town  council  of  Puyallup  and  such  pro- 
vision was  not  inserted  in  the  franchise.  That  Puyallup  is 


84 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


suburban  to  Tacoma,  many  persons  living  in  Puyallup  depend- 
ent for  their  livelihood  on  employment  in  Tacoma  as  labor- 
ers, clerks  and  mechanics,  and  similar  conditions  exist  as  to  such 
residents  as  have  heretofore  been  set  out  as  existing  in  other 
suburban  towns. 

Finding  No.  6. 

That  the  Seattle- Alaska- Yukon-Pacific  Exposition  opened  in 
the  month  of  June,  1909,  and  continued  during  the  months  of 
June,  July,  August  and  September,  and  the  increased  number  of 
passengers  carried  during  such  four  months  would  not  be  a 
fair  indication  of  the  normal  volume  of  business  transacted  by 
such  company,  but  the  increase  of  business  of  said  road  for  the 
months  of  January,  Ferbuary,  March,  April  and  May,  1909, 
over  the  corresponding  months  for  1908  was  practically  as 
follows : 

Number  of  Passengers  Carried. 


Month . 1908.  1909. 

January  168,290  204,180 

February  162,150  210,048 

March  177,815  245,814 

April  182,841  250,249 

May  213,380  276,130 


— whereas  after  said  increased  rates  were  in  force,  the  compari- 
son of  passengers  carried  for  the  corresponding  months  are  as 
follows : 

Number  of  Passengers  Carried. 


Month.  1908.  1909.  1910. 

November  198,450  168,643  

December  204,641  177,989  

January  168,290  204,180  166,918 


That  while  the  sales  of  tickets  at  the  ticket  offices  may  not 
fully  and  fairly  represent  the  falling  off*  of  travel  after  such  in- 
creased rates  were  in  force,  as  allowance  should  be  made  for  the 
increased  sales  on  the  train,  the  following  tends  to  indicate  the 
business  done  before  and  after  such  increased  rates  at  the  dif- 
ferent ticket  offices,  to-wit : 

The  ticket  sales  at  the  Seattle  office  for  travel  between  Seattle 
and  Foster  averaged  between  June  30th,  1909,  and  October 
16th,  1909,  $543.34  per  month,  while  between  October  17th  and 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


85 


the  1st  of  January  such  sales  decreased  to  an  average  of  $66.73 
per  month; 

That  the  same  office  showed  sales  between  Seattle  and  River- 
ton for  the  former  period  averaging  $629.15  per  month,  while 
for  the  latter  period  such  sales  decreased  to  an  average  of  $80.- 
35  per  month ; 

That  the  sales  between  Seattle  and  Duwamish  for  the  former 
period  averaged  $191.25,  while  for  the  latter  period  they  aver- 
aged $38.18  per  month; 

That  the  sales  for  the  former  period  between  Seattle  and 
Pacific  City  averaged  $335.34,  while  for  the  latter  period  they 
decreased  to  $130.30  per  month; 

That  for  the  former  period  the  sales  between  Seattle  and 
Tukwila  averaged  $345.91  per  month,  while  for  the  latter  period 
they  decreased  to  $38.96  per  month ; 

That  the  sales  for  the  former  period  between  Seattle  and  Kent 
averaged  $3,664.35  per  month,  while  for  the  latter  period  they 
decreased  to  $1,460.00  per  month; 

That  the  ticket  sales  at  the  Tacoma  office  showed  sales  to 
Edgewood  during  the  former  period  of  $70.00  per  month,  de- 
creasing during  the  latter  period  to  $33.00  per  month ; 

That  the  sales  for  the  former  period  between  Tacoma  and 
Jovita  averaged  $30.00  per  month,  decreasing  during  the  latter 
period  to  $21.00  per  month; 

That  the  ticket  sales  between  Tacoma  and  Auburn  for  the 
former  period  averaged  $553.80  per  month,  decreasing  during 
the  latter  period  to  $316.00  per  month ; 

That  the  ticket  sales  between  Tacoma  and  Kent  for  the  former 
period  averaged  $449.10  per  month,  decreasing  during  the  latter 
period  to  $239.25  per  month. 

Finding  No.  7. 

That  as  shown  by  the  accounting  records  of  said  company,  the 
cash  expended  in  constructing  and  equipping  the  road  at  the 
close  of  the  different  years  since  construction  was  the  amount 
set  forth  in  the  first  column  of  the  following  table,  the  net  re- 
turns derived  from  operation  being  set  out  in  the  second  column, 


86 


RAILROAD  COMMISSION  OF  WASHINGTON  vs. 


and  the  percentage  of  return  to  the  amount  invested  being  set 
out  in  the  third  column,  to-wit: 


Date  to  which  invest- 

Amount 

Net  earnings 
for  12  months 

Percent 

ment  extends. 

expended. 

ending  Dec.  81. 

of  return. 

March  31,  1903 

$1,961,914  02 

$101,119  30 

5.15 

December 

31,  1903 

2,339,105  20 

122,719  09 

5.25 

December 

31,  1904.  

2,490,123  37 

128,955  77 

5.18 

December 

31,  1905 

2,668,100  12 

207,021  21 

7.79 

December 

31,  1906 

2,874,652  44 

285,052  79 

9.92 

December 

31,  1907 

3,257,032  29 

247,562  82 

7.60 

December 

31,  1908 

3,721,206  40 

213,490  16 

5.74 

Finding  No.  8. 

That  the  operating  expenses,  deducted  from  the  gross  earn- 
ings so  as  to  leave  the  net  returns  mentioned  in  the  preceding 
finding,  include  the  amount  actually  incurred  in  maintenance  of 
way  and  structures,  including  such  replacements  and  renewals 
as  were  actually  made,  but  the  same  did  not  provide  for  a re- 
placement or  renewal  fund,  and  approximately  $51,000.00  has 
been  expended  for  and  charged  to  replacements  and  renewals. 
That  considering  the  nature  of  the  business,  the  volume  of 
business  and  the  rates  charged  in  the  past  therefor,  approxi- 
mately 25  per  cent,  of  the  gross  revenues  received  in  the  past 
should  have  been  expended  or  set  aside  for  maintenance  of  way, 
structures  and  equipment  and  to  care  for  floods  and  exigencies 
calling  for  renewals  and  replacements,  and  such  proportion 
thereof  as  was  not  expended  in  maintenance  and  renewals  should 
have  been  set  apart  in  a fund  to  care  for  such  replacements  and 
renewals,  and,  assuming  that  the  volume  of  business  for  the  year 
1910  will  be  similar  and  equal  to  that  for  1908  and  1909,  there 
should  be  set  aside  from  operating  expenses  a sum  approxi- 
mating $162,136.94  per  annum  to  care  for  such  maintenance  and 
depreciation.  That  the  amount  actually  expended  and  charged 
for  replacement  for  the  year  1908  was  the  sum  of  $91,511.15, 
and  the  amount  actually  expended  and  charged  to  such  main- 
tenance for  the  year  1909  was  the  sum  of  $102,125.21. 


Finding  No.  9. 

That  the  passengers  carried  into  Seattle  and  those  carried 
into  Tacoma  by  the  defendant  company’s  lines  are  discharged 
from  the  defendant  company’s  cars  in  the  business  centers  of 


PUGET  SOUND  ELECTRIC  RY— FINDINGS 


87 


the  respective  cities ; that  a train  leaves  each  of  said  cities 
practically  each  hour  from  6 a.  m.  until  12  o’clock  midnight; 
that  the  service  rendered  is  regular  and  reasonably  efficient ; that 
the  general  manager  and  district  manager  of  the  defendant  com- 
pany’s line  each  testified  that,  based  on  their  experience  under 
the  increased  rates  since  October  17th,  1909,  the  number  of 
passengers  carried  between  the  terminals  would  not  be  materially 
decreased  by  reason  of  the  increase  in  the  rates  between  such 
terminals,  and,  based  upon  such  testimony  and  the  tables  and 
figures  filed,  the  Commission  finds  that  at  least  an  equal  number 
of  passengers  will  be  carried  between  such  terminals  for  the 
year  1910  as  was  carried  under  the  old  rates  for  the  year  1909. 

Finding  No.  10. 

That  under  the  rates  in  force  prior  to  October  17th,  1909,  the 
revenue  derived  from  through  business  between  Seattle  and  Ta- 
coma was  approximately  56.8  per  cent,  of  the  gross  passenger 
receipts. 

Finding  No.  11. 

The  commission  finds  that  the  accounting  officers  of  the  de- 
fendant company’s  line  and  of  the  Seattle  Electric  Company’s 
lines  and  the  Tacoma  Railway  & Power  Company’s  lines  have 
misconstrued  in  their  settlements  the  terminal  contracts  exist- 
ing between  the  defendant  company  and  the  said  terminal  com- 
panies. That  in  the  past  in  the  settlements  no  allowance  has 
been  made  or  credit  given  the  defendant  company  for  passengers 
carried  by  the  defendant  over  its  line  where  the  passenger  has 
paid  the  terminal  company  the  5 cents  cash  fare  for  riding  on 
the  street-car  system  of  such  terminal  campany  and  thereafter 
presented  his  transfer  and  received  a credit  in  purchasing  his 
ticket  from  the  defendant  company.  That  for  the  year  1909 
the  defendant  company  was  entitled  to  have  received  from  the 
Seattle  Electric  Company  the  sum  of  $4,480.90,  which  it  did  not 
receive  and  was  not  credited  with  from  such  source,  and  should 
have  received  from  the  Tacoma  Railway  & Power  Company  the 
sum  of  $1,309.24,  which  it  did  not  receive  and  was  not  credited 
with  from  such  Tacoma  Railway  & Power  Company,  and  had 


88 


RAILROAD  COMMISSION  OP  WASHINGTON  vs. 


such  payments  been  made  and  received  the  net  earnings  would 
have  been  increased  in  the  sum  of  $5,790.14. 

Finding  No.  12. 

That  on  the  first  day  of  July,  1909,  a new  contract  was 
entered  into  with  the  Seattle  Electric  Company  concerning  the 
amounts  to  be  paid  by  the  Seattle  Electric  Company  for  pas- 
sengers carried  in  the  cars  of  the  defendant  over  the  lines  of  the 
Seattle  Electric  Company  within  the  city  of  Seattle  and  destined 
to  points  on  the  defendant  company’s  lines  outside  of  the  city 
and  beyond  the  lines  of  the  Seattle  Electric  Company  by  which 
the  defendant  company  was  to  receive  from  the  Seattle  Elec- 
tric Company  3 % cents  per  passenger,  whereas  under  the  con- 
tract in  force  prior  thereto  the  defendant  received  but  2 cents 
per  passenger  for  a similar  service.  That  during  the  fiscal 
year  ending  June  30th,  1909,  the  Seattle  Electric  Company 
carried  in  the  cars  of  the  defendant,  for  which  it  collected  the 
fares,  passengers  coming  from  and  destined  to  points  on  the  line 
of  the  defendant  company  outside  of  the  city  of  Seattle  and 
beyond  its  lines,  2,118,768  passengers,  and  had  such  contract 
been  in  force  for  such  fiscal  year,  the  defendant  would  have  re- 
ceived from  such  source,  in  addition  to  what  it  did  receive,  the 
sum  of  $26,484.54. 

Finding  No.  13. 

That  for  the  year  1908  the  taxes  assessed  against  the  defend- 
ant’s entire  real  and  personal  property  by  the  cities,  counties  and 
State  of  Washington  amounted  to  $16,244.57,  and  for  the  year 
1909  the  total  amount  so  assessed  against  such  property  was 
the  sum  of  $68,000.00.  The  assessment  is  in  litigation,  the  de- 
fendant claiming  that  the  assessment  is  excessive.  The  defend- 
ant in  its  annual  report  to  the  Commission  places  its  total  taxes 
for  the  year  1909  at  $46,073.58.  The  Commission  estimated 
the  taxes  for  the  ensuing  year  at  $50,000.00,  53  per  cent,  of 
which  is  properly  chargeable  to  the  operating  property  of  the 
defendant  and  47  per  cent,  of  which  should  be  borne  by  the  non- 
operating property. 


PUGET  SOUND  ELECTRIC  RY—  FINDINGS 


89 


Finding  No.  14. 

That  the  net  earnings  of  the  company  for  the  year  1910, 
based  on  the  rates  now  in  force,  modified  by  the  conclusions 
reached  herein  and  under  the  terminal  contracts  now  in  force, 
are  estimated  by  the  Commission  to  amount  to  the  sum  of 
$289,179.32,  made  up  as  follows: 


Gross  earnings  for  1909,  settlements  being  made  between 
terminal  companies  and  defendant  as  per  contract  in  force 
prior  to  July  1st,  1909,  under  the  construction  adopted  by 

the  accounting  officers $756,671  71 

224,045  passengers  carried  in  Seattle  on  transfers  honored 
(omitted  from  consideration  in  settlement),  on  which  de- 
fendant should  have  2 cents  additional 4,480  90 

65,462  passengers  carried  in  Tacoma  on  transfers  honored 
(omitted  from  consideration  in  settlement),  on  which  de- 
fendant should  have  received  2 cents  net 1,309  24 

2,118,763  passengers  carried  in  Seattle,  and  under  new  con- 
tract defendant  receives  1%  cents  additional  per  passenger  26,484  54 
Additional  revenue  from  through  passengers  (Seattle-Ta- 

coma)  under  increased  rates  approximating  23.37  percent.  (>6,610  59 


Additional  revenue  from  local  and  single  trip  passengers,  esti- 


mated   3,000  00 

Gross  earnings,  total $858,556  98 


OPERATING  EXPENSES. 

Operating  expenses  for  the  year  1909  (annual  report,  omit- 
ting credit  of  $1,119.54) $395,115  42 

Increase  in  operating  expenses,  if  report  had  been  made  un- 
der old  contract  charging  3 cents  per  passenger  carried 
within  Seattle  and  Tacoma,  to  the  cost  of  operation  (on 

transfers  honored)  87,750  51 

Additional  amount  to  cover  estimated  maintenance  and  de- 
preciation   .* 60,011  73 

Estimated  taxes  for  the  year  on  operating  property  (53  per 

cent,  of  $50,000) 26,500  00 

Total  operating  expenses $569,377  66 

Estimated  net  earnings 289,179  32 

Grand  total $858,556  98 

Witness  the  Railroad  Commission  of  Washington  this  26th 
day  of  February,  1910. 

The  Railroad  Commission  of  Washington, 

By  H.  A.  Fairchild,  Chairman. 

J.  C.  Lawrence,  Commissioner. 
Attest:  Jesse  S.  Jones,  Commissioner. 

F.  M.  Larned,  Secretary. 


